Mintech Resources Pty Ltd v Russell-Taylor
[2012] SASCFC 67
•8 June 2012
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
MINTECH RESOURCES PTY LTD & ANOR v RUSSELL-TAYLOR & ANOR
[2012] SASCFC 67
Judgment of The Full Court
(The Honourable Justice White, The Honourable Justice Peek and The Honourable Justice Stanley)
8 June 2012
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - PROCEDURAL FAIRNESS - HEARING
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - IN GENERAL
The respondent sought judicial review of a decision by the Minister for Mineral Resources Development to grant mining exploration licences over certain areas to the appellants. A Judge found that, by failing to consider the respondent's objections to the Department's proposed method of determining the grant of the licences, the Minister had failed to afford natural justice to the respondent and made orders in the nature of certioarari.
Whether appellants had been put on notice, or sufficiently on notice, that the Judge may grant judicial review on those grounds - whether the Judge had reached conclusions of fact which were not available on the evidence.
Held, allowing the appeal, setting aside the orders made by the Judge and substituting an order dimissing the application for judicial review: non-compliance with the hearing rule had not been raised by the plaintiff, either by way of his pleading or in the course of the trial - the Judge had raised the issue in the course of final addresses but not so as to put the defendants sufficiently on notice that the application for judicial review may be determined adversely to them on that basis - the evidence before the Court was insufficient to found the inferences upon which the Judge's decision was based.
Mining Act 1971 (SA) Pt 5, referred to.
Williams v Australian Telecommunications Commission (1988) 52 SASR 215; Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279; Stead v State Government Insurance Commission (1986) 161 CLR 141; Reg v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (1969) 122 CLR 546, discussed.
Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487; FAI Insurances Ltd v Winneke (1982) 151 CLR 342; Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490; Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356, considered.
MINTECH RESOURCES PTY LTD & ANOR v RUSSELL-TAYLOR & ANOR
[2012] SASCFC 67MINTECH RESOURCES PTY LTD & ANOR v
RUSSELL-TAYLOR & ANORFull Court: White, Peek and Stanley JJ
WHITE J. By Pt 5 of the Mining Act 1971 (SA), the Minister for Mineral Resources Development may grant exploration licences permitting the licensees to explore for minerals on defined mineral tenements. The grant of a licence can be valuable as, other than in limited circumstances, the holder of the licence has exclusive rights to explore for minerals on the land to which the licence relates and the right to apply for a mining lease to exploit any minerals which are discovered.
It has been the general, but not invariable, practice of the Minister and the Department of Primary Industries and Resources (SA) (PIRSA) to determine applications for exploration licences in the order in which they are received. This practice is referred to colloquially as the “first come – first served” basis of determination.[1]
[1] PIRSA refers to this basis of decision making in the Information Sheet which it provides to prospective applicants for exploration licences.
In 2007, PIRSA departed from this basis of determination in relation to overlapping applications for exploration licences lodged by the first respondent (Mr Russell-Taylor) and by others, including the present appellants. Instead, the Minister’s delegate determined the applications by an assessment of their comparative merits. That assessment did not favour Mr Russell‑Taylor, with the result that his competitors were granted exploration licences over the areas which he had sought, and he was granted exploration licences only in respect of areas for which there was no overlapping application.
Mr Russell‑Taylor sought declarations as to the invalidity of a number of the decisions made by PIRSA in the assessment and determination process, as well as declarations as to the invalidity of the exploration licences granted to his competitors.
A Judge of this Court rejected Mr Russell‑Taylor’s claims as pleaded. However, the Judge found that, by failing to consider his objections to its proposed method of determining the competing applications and to the proposal to depart from a first come – first served determination, PIRSA had not afforded natural justice to Mr Russell‑Taylor. I will refer to this as “the method decision”. Accordingly, the Judge made orders in the nature of certiorari, setting aside the decisions which were adverse to Mr Russell‑Taylor, and directing the Minister to determine the competing applications according to law.[2]
[2] Russell‑Taylor v State of South Australia and Ors [2011] SASC 238.
The appellants appeal against this decision on various grounds. Principally, they contend that they had not been put on notice, or sufficiently on notice, that the Judge may grant judicial review of the method decision on grounds of denial of a fair hearing. They also contend that the Judge erred by reversing the onus of proof and that he had, in any event, reached conclusions of fact which were not available on the evidence. Finally, the appellants complain of a consequential decision of the Judge to set aside an interlocutory costs order made by another Judge earlier in the proceedings.
The appellants, Mintech Resources Pty Ltd (Mintech) and Mawson Gold NL (Mawson), were the third and fourth defendants in the judicial review proceedings. They had lodged applications for exploration licences for areas which overlapped those of Mr Russell‑Taylor and were, in the main, successful in obtaining licences in respect of those areas.
Mr Russell‑Taylor is the first respondent to the appeal. The State of South Australia is the second respondent but did not participate in the appeal. The State and the Minister, Mr Holloway, were the first and second defendants at the trial.
Mr Russell‑Taylor represented himself in the hearing before the Judge, although it is apparent that he had had some legal assistance before the commencement of the trial.
No Appearance by Mr Russell‑Taylor at the Hearing of the Appeal
It is clear that Mr Russell‑Taylor was well aware of the appeal. However, he did not attend the appeal hearing and took no part in it. It is appropriate to record the circumstances relating to his non‑attendance.
At the callover of appeals for hearing by the Full Court, the Chief Justice informed the parties that the hearing would commence at 2.15 pm on 8 May 2012. Mr Russell‑Taylor told the Chief Justice that he did not intend to brief counsel and asked for the hearing to be deferred until July. The Chief Justice declined to defer the hearing for such a long period and invited Mr Russell‑Taylor to make a written submission if he did not intend to attend. The Chief Justice then, in Mr‑Russell‑Taylor’s presence, listed the appeal to commence at 2.15 pm on 8 May.
Prior to 8 May, a Judge’s Associate twice reminded Mr Russell‑Taylor by email that he was to provide a written summary of his argument and a list of authorities for the hearing. Mr Russell‑Taylor made no response to those emails. Nor did he provide any written submissions, a summary of argument or a list of authorities.
However, Mr Russell‑Taylor was physically present in the Court on 8 May. At just before 2.00 pm, he lodged a document entitled “Notice of Appeal – Second Amended” in the Court’s Registry which, on its face, purported to be a notice of appeal against the decision of the trial Judge. The document included on its face an endorsement indicating that it was required for the Full Court hearing at 2.15 pm that day.
Further, as reported by counsel for the appellant, Mr Russell‑Taylor came into the Courtroom shortly before 2.15 pm, but left saying words to the effect, “I’m out of here, there’s no point in hanging around”.
Mr Russell‑Taylor did not respond to a formal call when the appeal was called on for hearing. Nor did he, by any means, provide an explanation for his non‑attendance.
In the circumstances just described, the Court was satisfied that Mr Russell‑Taylor was aware of the appeal hearing and had made a conscious decision not to participate. It determined that it was appropriate to proceed with the hearing of the appeal in his absence.
Background Circumstances
Mintech, Mawson and Goldus Pty Ltd (Goldus) had previously been granted exploration licences: EL 2799 to Mintech on 19 February 2001; EL 3060 to Mawson on 12 February 2003; and ELs 2822, 2823 and 2824 to Goldus on 17 July 2001. The Judge referred to these licensees collectively as the Goldus Group. It is convenient to do likewise although Mawson is not a subsidiary of Goldus and they do not form a group in the conventional sense.
In December 2004, in circumstances which it is unnecessary to describe, a delegate of the Minister cancelled the exploration licences held by the Goldus Group. Mr Russell‑Taylor became aware of the cancellations and, on 29 December 2004, lodged two applications for exploration licences (ELA 924 and ELA 925) in respect of areas which were previously subject to the licences of the Goldus Group. Two days later, PepinNini Minerals Pty Ltd (PepinNini) lodged an application for an exploration licence for an area which partially overlapped Mr Russell‑Taylor’s ELA 924, the area of the previous Mintech licence, and the area of one of the previous Goldus licences. On 4 January 2005, another entity, Gladstone Resources Ltd (Gladstone) lodged an application for an exploration licence (ELA 002) for an area which partially overlapped Mr Russell‑Taylor’s ELA 925 and the area which was subject to the previous exploration licence of Mawson.
However, PIRSA did not proceed to determine those applications at that time. This was because the Goldus Group had appealed to the Environment and Resources Development Court against the cancellation of their licences. The Acting Mining Registrar informed Mr Russell‑Taylor, PepinNini and Gladstone that she intended to defer the processing of their respective applications until the outcome of the appeals to the ERD Court was known.
Subsequently, the Minister consented to orders by the ERD Court declaring void the cancellations of the exploration licences held by the Goldus Group and the Court made orders to that effect on 18 November 2005.
In the meantime, the exploration licences of the Goldus Group had expired by reason of the absence of any application for their renewal. As I understand it, it was thought that the previous cancellations precluded any renewal of the licences and this explained the absence of renewal applications. It seems that there was some consideration given as to whether the previous licences should be reinstated following the orders made in the ERD Court. It is not necessary to record all the discussions and communications which occurred in that respect.
Eventually, Dr Heithersay, the Executive Director of the Minerals, Energy and Resources Division of PIRSA, informed the Goldus Group that applications for exploration licences had to be lodged by 28 February 2007, after which PIRSA would proceed to determine all undecided applications. On 27 February 2007, Mawson lodged ELA 99 in respect of part of the area formerly covered by its previous exploration licence and Goldus lodged ELA 101 in respect of part of the area formerly covered by EL 2799 held by Mintech (later Mintech was substituted as the applicant for Goldus). On 2 March 2007, Goldus lodged ELA 116 in respect of part of the area formerly covered by its EL 2822.
As noted at the outset of these reasons, the power to grant exploration licences is vested in the Minister. At material times, Mr Holloway was the relevant Minister. By s 12 of the Mining Act, the Minister is empowered to delegate certain functions to Departmental officers. The Judge found that relevant delegations had been given to Dr Heithersay and to Dr Tyne, the Department’s Director of Mineral Resources.
It seems that Mr Russell‑Taylor was concerned at the long lapse of time without his applications of 29 December 2004 being determined. On 28 June 2007, he commenced the present action seeking orders by way of judicial review against the State and others, requiring, amongst other things, the grant of exploration licences to him in terms of his applications.
On 20 July 2007, the Acting Mining Registrar wrote identical letters to each of the six applicants. Each letter said that the applicant’s application was competing with other applications; that the applications would require assessment by a technical panel of departmental officers; and requested the applicant to provide specified information relevant to the assessment, including evidence of financial capacity. The Judge found that this was the first time that Mr Russell‑Taylor, PepinNini and Gladstone had been informed of the proposed method of decision.
By letter from his solicitor of 30 July 2007, Mr Russell‑Taylor protested that there should not be any competing applications because his were first in time and sought an extension of time in which to provide the requested information.
On 15 August 2007, Ms Watson, the Department’s Deputy Mining Registrar and Exploration Coordinator, wrote to the applicants informing them that, amongst other things, the Department intended to depart from its usual policy in the manner of granting exploration licences; that it was doing so because the applications overlapped areas which had been covered by the licences which the holders had been denied the opportunity to exploit fully by reason of the Department’s wrongful cancellations; that the Department now intended to determine the applications on merit and, in doing so, would afford the former holders of the wrongly cancelled licences some additional weight in the process; and required any objections to the proposed departure from the usual procedure to be provided to the Department in writing by 24 August 2007.
By letter dated 23 August 2007, Mr Russell‑Taylor’s solicitor objected to the process which had been outlined in the Department’s letters of 20 July and 15 August 2007 and asserted that there was no good or valid reason for it to depart from the first come-first served practice. The solicitor also informed the Department that Mr Russell‑Taylor had arranged substantial financial resources in order to exploit any exploration licence granted to him and enquired as to the means by which the confidentiality of those resources could be preserved.
PIRSA decided that it should be Dr Tyne who would exercise the Minister’s delegated power to consider and determine the various applications. This was because Dr Heithersay and Ms Freeman were defendants to the proceedings which Mr Russell‑Taylor had commenced in this Court. Dr Tyne convened an ad hoc Exploration Licence Assessment Panel (the Panel) under his own chairmanship to consider the respective applications and to make recommendations to him. The other members of the Panel were officers within the Department. The Panel met on 31 August 2007.
After making an assessment in accordance with identified assessment criteria (which did not include any weighting in favour of the previous licencees), the Panel recommended that Mawson be granted an exploration licence in respect of an area identified as Area 1, that PepinNini be granted licences in respect of areas numbered 2 and 3, and that Mintech be granted licences in respect of areas numbered 4 and 5. The effect was that Mr Russell‑Taylor and Goldus would be granted exploration licences only in respect of areas which were not the subject of contest by any other application.
At the time the Panel made those recommendations, Mr Russell‑Taylor had not provided the financial information sought by the Department. It seems that this was because his concerns about the confidentiality of that material had not been addressed. Following approaches by Mr Russell‑Taylor and his subsequent provision of the requested information, the Panel reconvened and considered the applications further. However, at the end of that reconsideration it confirmed its previous assessment.
Dr Tyne then acted on the Panel’s recommendations. By letters dated 24 January 2008, the Mining Registrar informed the applicants, including Mr Russell‑Taylor, of the determinations by the Minister’s delegate and of the terms upon which each would be granted exploration licences.
Mr Russell‑Taylor then amended his statement of claim to seek declarations that the decisions to offer exploration licences to Mawson, Mintech and PepinNini, as well as certain of the decisions leading to those final decisions, were void. The case proceeded before the Judge on the basis that, although couched in terms of declarations, the relief which Mr Russell‑Taylor sought was in the nature of certiorari.
Mr Russell‑Taylor’s principal complaint was that PIRSA was not permitted by the Mining Act to depart from the first come - first served basis of assessment or, alternatively, that he had a substantive entitlement arising from his legitimate expectation to have his applications determined on that basis. He was also concerned that his applications had not been considered on their merits. Mr Russell‑Taylor did assert that he had been denied procedural fairness, but his complaints in that respect related to the Panel having initially determined his applications without agreeing to receive the evidence of his financial capacity under conditions of confidentiality.
The Judge’s Decision
The Judge rejected Mr Russell‑Taylor’s claims that:
1.the Minister had no power under the Mining Act to grant exploration licences on other than the first come - first served basis;
2.his legitimate expectation that the Minister and the Department would process and grant licences on the first come - first served basis gave rise to a substantive entitlement to the grant of the exploration licences for which he had applied;
3.the consent orders made by the ERD Court revoking the cancellation of the licences of the Goldus Group were beyond that Court’s jurisdiction.
The Judge concluded that several of the “decisions” in respect of which Mr Russell‑Taylor sought certiorari were not amenable to that form of relief.
However, the Judge considered that Mr Russell‑Taylor’s legitimate expectation that the Minister and the Department would grant exploration licences on a first come - first served basis gave rise to procedural entitlements. This finding was not controversial as the defendants accepted that Mr Russell‑Taylor did have such a legitimate expectation and also accepted that this gave rise to “natural justice rights”, as opposed to substantive rights.
The Judge then went on to find that Mr Russell‑Taylor’s legitimate expectation meant that the Minister and the Department were obliged to provide him with the opportunity to submit material in support of his objection and to give proper consideration to his objection. In this respect, the Judge referred to passages in the judgments of Aickin J in Heatley v Tasmanian Racing and Gaming Commission[3] and in FAI Insurances Ltd v Winneke[4] to the effect that natural justice requires, not only an opportunity to the affected party to make submissions to the decision‑maker, but also that the decision‑maker consider those submissions. I will refer to this as “the hearing rule”.
[3] (1977) 137 CLR 487 at 513-4, 516.
[4] (1982) 151 CLR 342 at 383-4.
The Judge held that Dr Tyne had made the method decision and had subsequently recommended the grant of licences to Mawson, Mintech and PepinNini without complying with the requirements of the hearing rule. This was because Dr Tyne had not considered the submission from Mr Russell‑Taylor’s solicitor dated 23 August 2007 that the Department should not depart from the first come - first served basis of assessment.
Denial of Procedural Fairness
The appellant’s principal contention was that the Judge had determined the judicial review application adversely to them on a basis upon which they had not had notice, or sufficient notice. In effect, they contended that they themselves were denied procedural fairness because they had not been on notice that the Judge may determine the application by finding that Mr Russell‑Taylor was denied natural justice in the method decision.
Having reviewed the pleadings, the course of evidence at the trial, and the final submissions to the Judge, I consider that the appellants’ contention should be upheld.
Issue Not Raised by the Pleadings
Pleadings play an important role in identifying the issues to be determined at trial and thereby in giving the parties proper notice of the claims which they must meet. King CJ spoke of this important function of pleadings in Williams v Australian Telecommunications Commission:[5]
The fundamental purpose of pleadings is to provide a structure or framework for the litigation designed to promote a just outcome. Pleadings achieve this purpose by performing two basic functions. The first is to define the issues between the parties thereby providing the basis for the determination of questions as to discovery before trial and admissibility of evidence at trial and of questions as to what the litigation has decided for the purposes of the rules as to res judicata and issue estoppel. The second function is to give the parties fair notice of the case to be made against them at trial thereby minimising the risk of injustice resulting from surprise.[6]
(Emphasis added)
Similarly, Mason CJ and Gaudron J in Banque Commerciale SA (in liq) v Akhil Holdings Ltd[7] said:
The function of pleadings is to state with sufficient clarity the case which must be met. ... In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.[8]
(Citations omitted)
[5] (1988) 52 SASR 215.
[6] Ibid at 216. See also H Stanke & Sons v O’Meara [2007] SASC 246 at [75]; (2007) 98 SASR 450 at 465-6.
[7] (1990) 1690 CLR 279.
[8] Ibid at 286.
Apart from an application to amend, which is not material for present purposes, the trial proceeded by reference to the further amended statement of claim (FASC) filed by Mr Russell‑Taylor on 9 March 2010. Although Mr Russell‑Taylor was unrepresented at the trial, it can be inferred that he did have some legal assistance in the preparation of the FASC, or at least of a predecessor to it.
The FASC pleads a number of background matters relating to Mr Russell‑Taylor’s lodgement of the two applications for exploration licences, pleads the longstanding practice of the Department granting applications for exploration licences on a first come - first served basis, and pleads the notification by the Department to Mr Russell‑Taylor on 15 August 2007 that it intended to depart from that practice in relation to the various overlapping applications it had received in relation to the areas covered by the exploration licences which the Department now recognised it had cancelled wrongfully.
The FASC alleged expressly a denial of procedural fairness in pars [38] and [47]. Each was a complaint that the assessment by the Panel of 31 August 2007 had occurred without the Panel obtaining evidence from Mr Russell‑Taylor of his financial capacity to undertake exploration work. This was a discrete allegation of denial of procedural fairness and, as such, these paragraphs did not provide a basis in the pleading for the particular form of procedural unfairness found by the Judge.
Mr Russell‑Taylor did plead his notification to PIRSA of his objection to the proposed method of assessment of the competing applications:
[26]By letter dated 23 August 2007 from the plaintiff’s solicitors to the State of South Australia objection was made to the determination process set out in the letter [of] 20 July 2007 from the State of South Australia to the plaintiff. The State of South Australia has never responded to that letter.
The allegation that PIRSA had not responded to the letter of 23 August cannot reasonably be regarded as a plea that the letter was not considered. At its highest, the absence of response could be no more than some evidence that the submission had not been considered.
In later paragraphs, Mr Russell‑Taylor pleaded his expectation that he would be granted the exploration licences if the Department followed its usual practice, the departure by the Department from that practice, and the denial to him of “his lawful rights and justifiable expectation” that, as the applicant who was first in time, he would be granted the licences which he sought. I refer in particular to pars [42], [45(2)], and [48].
[42]It was the expectation of the Plaintiff, based on the common and usual practice, that as his applications were the first applications for Exploration Licences in respect of the areas covered by the applications the Mining Registrar would, subject to any right of appeal from the former licensee, grant such applications.
…
[45(2)]In the premises the decision of PIRSA to refer the allegedly competing Applications to its Exploration Licence Assessment Panel to assess the merits of such Applications and to make recommendations as to the granting of Exploration Licences over the various areas was contrary to the usual practice of the State of South Australia and was also contrary to its own written guidelines.
…
[48]The decision of the Director of Mines to accept the recommendations made by the Exploration Licence Assessment Panel as to the granting of the Exploration Licences which is evidenced by the two letters from the State of South Australia to the Plaintiff dated 3 October 2007 denied the Plaintiff … his lawful rights and justifiable expectation that the State of South Australia should have granted the Plaintiff Licences for the whole of the area specified in his respective Applications for Exploration Licences.
In Part 2 of the FASC Mr Russell‑Taylor indicated that he sought, amongst other things:
(b)A declaration that the decision of the State of South Australia to refer the Exploration Licence Application to the Exploration Licence Assessment Panel for assessment as competitive applications was void.
In my opinion, these pleas cannot be said to have raised directly the ground of non‑compliance with the hearing rule on which the Judge determined the judicial review application. Instead Mr Russell‑Taylor was asserting a substantive entitlement to have his applications determined before consideration of any other applications.
Mr Russell‑Taylor did not particularise the “lawful rights” to which he referred in par [48]. It would have been proper for him to have done so. It can be said that one of Mr Russell‑Taylor’s lawful rights was an entitlement to have his objection to the proposed method of determination properly considered. However, in context, I do not consider that it can be said that this is the subject of the plea. Instead, Mr Russell‑Taylor was asserting a substantive entitlement to the grant of licences because his applications were first in time. That is especially so given the presence of express pleas in the FASC of a denial of procedural fairness in relation to other aspects of the decision of 31 August 2007 and the absence of an express plea of procedural unfairness in the method decision.
Accordingly, I consider that the FASC did not put the defendants on notice that Mr Russell‑Taylor sought relief on the basis of non‑compliance with the hearing rule in the method decision.
The Course of the Trial
The absence of any plea of non‑compliance with the hearing rule is not conclusive of the appellants’ present contention. It is to be kept in mind that pleadings are but a means to an end. As Isaacs and Rich JJ observed in Gould v Mount Oxide Mines Ltd (in liq),[9] if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is not possible for them later to revert to the pleadings and treat them as governing the area of contest.
[9] (1916) 22 CLR 490 at 517.
Accordingly, it is necessary to consider whether the appellants were put on notice during the course of the trial that non‑compliance with the hearing rule in the method decision may be the basis for the Judge’s decision.
Prior to the commencement of the trial, the defendants provided the Judge with a joint statement of the issues which they contended arose for determination on Mr Russell‑Taylor’s application. That joint statement did not identify non‑compliance with the hearing rule in the method decision as one such issue. Nor did the statement of issues provided by Mr Russell‑Taylor on 5 September 2011.
On several occasions, counsel for one or other of the defendants made it clear to Mr Russell‑Taylor that he was being held strictly to his pleaded case. Counsel for the appellants made an express statement to that effect in par [1] of the document entitled “Notice of Contentions of the Fifth and Sixth Defendants” which was filed in the Court on 14 July 2011, two months before the commencement of the trial.
Further, on more than one occasion during the course of the trial, counsel objected to evidence which Mr Russell‑Taylor sought to lead on the basis that the proposed evidence did not relate to any matter raised by the pleadings. The proposed evidence did not relate to compliance with the hearing rule but the defendants’ objections nevertheless served to indicate that they had come to trial prepared to meet those issues raised by Mr Russell‑Taylor’s pleading.
As the Full Court of the Federal Court observed in Betfair Pty Ltd v Racing New South Wales,[10] statements to the effect that a party is being held to its pleading do not dictate the course of the proceedings, which are of course in the control of the Court. Such statements can however serve to evidence the particular party’s understanding that the issues to be determined by the Court are limited to those identified by the pleadings.
[10] [2010] FCAFC 133; (2010) 189 FCR 356.
The Judge also made it plain to Mr Russell‑Taylor that the issues which he would determine in the trial were those raised by the pleadings. The Judge made an express statement to that effect in the explanation of the procedure to be adopted at the trial which he gave to Mr Russell‑Taylor at the commencement of the trial. The Judge made further statements to this effect from time to time during the trial. At the conclusion of the evidence led by Mr Russell‑Taylor, the Judge informed him of his ability to apply to amend his pleadings and suggested that it would be sensible for him to review his statement of claim to check that it did raise adequately the matters which he wished to have the Court determine.
Mr Russell‑Taylor did not make any reference to a claim of non‑compliance with the hearing rule in the method decision during the course of his opening.
The Evidence in the Trial
The evidence adduced by both sides indicates that procedural fairness in the method decision was not a live issue in the trial. The most important evidence which could have been led on this topic would have been from the person who exercised the Minister’s delegated power of considering and determining the various applications, Dr Tyne.
The State, which called Dr Tyne, did not lead any evidence from him about his or the Panel’s consideration of Mr Russell Taylor’s objection to its proposed method of determining the competing applications. Nor did Mr Russell-Taylor. In Mr Russell-Taylor’s cross-examination, he drew Dr Tyne’s attention to his solicitor’s letter of 23 August 2007, which was at pp 67 and 68 of a tender bundle. The following cross-examination then occurred:
QAre you familiar with the documents on p 67 and p 68?
AI would say that I’m not familiar with that. I vaguely recall the receipt of that letter, yes.
QWas that considered at all through the Panel on 31 August?
AMay I have an opportunity to just read it and see if it jogs my memory?
QYes.
AYes, I do, in general, recall. I don’t recall the details of the letter but I certainly recall the intent of the letter which is querying PIRSA’s implementation of a merit selection process of competing applications rather than … the expectation by the author that all applications be on first-come-first-served basis.
QIndeed, I’m not here to sort of ask you about the intent of the letter so much as was the intent considered, considering the first letter we discussed, which was document 60, in relation to a very – I would say very brief exploration overview of only several paragraphs. In the light of the documents you have before you, 67 and 68, and the intent of the plaintiff, in his reluctance to participate in the Panel, in his belief that the matter [was] before the Warden’s Court or elsewhere, was his right to claim the leases outright, did you think the reluctance of the participant, being me, was such that it might have warranted further investigation …
A… I do recall the letter and I do recall that the intent of the letter was discussed during the opening of the Panel. And the minutes of the Panel and the instruction in my position as the Chair, which is on the next page, p 69, just outlines the process of the Panel in relation to dealing with competing applications. So certainly I recall being shown your letter and this was certainly discussed in the mineral tenements area. I am not aware of whether legal advice was sought at that time.
(Emphasis added)
Apart from these questions Mr Russell-Taylor did not otherwise cross-examine Dr Tyne as to the consideration which had been given to his solicitor’s letter of 23 August 2007. Mr Russell-Taylor’s next questions concerned the Panel’s consideration of Mr Russell-Taylor’s reluctance to participate in a merits review and to provide information to the Panel. In this context, Mr Russell-Taylor’s questions could not reasonably have been understood at the time as cross-examination directed to a failure by Dr Tyne to consider his objections to the method of determination, Mr Russell-Taylor having not pursued the manner in which the Panel had considered his objections and the regard which had been had to those objections.
The first and second defendants did lead some evidence on the topic from Ms Watson, the Deputy Mining Registrar and Exploration Coordinator. The following passages from Ms Watson’s affidavit which comprised her evidence–in‑chief are pertinent:
[7]On 15 August 2007 I wrote to the plaintiff again, to inform him in greater detail of the method by which PIRSA intended to determine the competing applications for exploration licences, including his two applications, and the reasons for the change in procedure. I said that the applications would not be determined on the usual “first-come, first-served” basis nor by ballot but by an assessment of the relative merits of each application. I also invited the plaintiff to provide his objections or comments on the proposed departure from the usual policy. …
[8]The plaintiff’s objections to the departure from the “first-come, first-served” policy were received in the form of a letter dated 23 August 2007 from Mr Proud. …
[9]I considered the contents of Mr Proud’s letter but decided, after consultation with my colleagues at PIRSA, that the objections raised did not warrant PIRSA proceeding in a manner other than that as set out in my letter of 15 August 2007; that is, determining the competing applications by an assessment of their relevant merits. …
It appears that Ms Watson recounted these matters as part of a chronological account of the steps which occurred within PIRSA in relation to the determination of the ELAs. Ms Watson was not purporting to address the issue of procedural fairness in the method decision.
No challenge was made by Mr Russell‑Taylor in his cross-examination of Ms Watson to the contents of those paragraphs of her affidavit. Mr Russell‑Taylor did ask Ms Watson whether the letters of the solicitor dated 10 and 23 August 2007 had been placed before the Panel. Her response was that she “would have thought” that the letters were placed before the Panel. Mr Russell‑Taylor did not pursue any further questions on that topic with Ms Watson.
The solicitor’s letter of 23 August was referred to in other contexts in the trial. However, the matters mentioned appear to be the only references in the evidence which could possibly bear on the issue of compliance with the hearing rule in the method decision. That being so, it cannot be concluded, in my opinion, that the trial was conducted on the basis that the procedural fairness of that decision was in issue.
Final Submissions
Counsel for the present appellants and counsel for the State did, in their final written submissions, touch on the obligation to provide procedural fairness in the method of determination decision. Each accepted that the State had an obligation to provide procedural fairness and each submitted that the State had done so by the Department’s letter of 15 August 2008 and by the receipt and consideration of Mr Russell‑Taylor’s solicitor’s letter of 23 August 2007. These submissions were made as an incident of, and prelude to, their submissions concerning the alleged denial of procedural fairness which Mr Russell‑Taylor had pleaded.
It was the Judge who, during the course of the parties’ final submissions, raised the possibility that Dr Tyne may not have complied with the hearing rule in the method decision.
The Judge raised directly with counsel for the State whether the evidence suggested that Dr Tyne, as Chair of the Panel, had understood his function to be that of carrying out an assessment of the relative merits of each application, rather than deciding whether it was appropriate to proceed using a merits‑based assessment at all. In response, counsel for the State submitted that Dr Tyne had, as he was entitled to, adopted the “preliminary” decisions which had been made within the Department before the assessment by the Panel and had incorporated them into his decision making in the Panel assessment.
Later, counsel for the State submitted that the objection made in Mr Russell‑Taylor’s solicitor’s letter of 23 August 2007 had been considered by the Panel itself. He referred to the evidence of Dr Tyne and of Ms Watson to support that submission. In this way counsel for the State was given the opportunity to comment on the issue, but this was in the context of the evidence led at the trial. As noted, that evidence was not directed to this issue.
I note that counsel for the State did not indicate, as part of his submissions, that the Judge’s questions raised an issue which did not arise for determination in the proceedings. However, counsel for the present appellants made an express submission to that effect:
Counsel:So turning to procedural fairness, can I begin by first observing that in Mr Russell‑Taylor’s written submissions the few references to procedural fairness actually appear to be references to the decision to depart from the first come – first served policy, although he’s used the expression procedural fairness particularly in paras 21 and 38? We don’t actually understand them to be a reference to the issue which we have on this side of the bar table been talking about as the procedural fairness issue. Really, in my submission, those are in fact instances of complaints about substantive unfairness, not procedural unfairness properly so‑called.
His Honour: So I’m clear, when you’re talking about procedural fairness, are you talking about evidence of financial capability?
Counsel:Yes.
His Honour: Exclusively that topic?
Counsel:Yes, we see the question of the first come – first served policy as not involving a question of procedural fairness at all. We accept that the change from that policy gave rise to a requirement to afford a hearing and that appears from our submissions and our position in that respect is along the same lines as [counsel for the State], but that’s not a pleaded error and it is not an error at all because that opportunity was given to the plaintiff.[11]
The Judge did not respond to that objection at the time, and nor did Mr Russell‑Taylor. In particular, the correctness or otherwise of counsel’s submission that the issue was not raised on the pleadings was not challenged during the hearing. Nor did the Judge enquire whether the defendants would be prejudiced if he were to determine the issue despite it not having been raised on the pleadings.
[11] T707.
Mr Russell‑Taylor’s written submissions did not claim that Dr Tyne or PIRSA had failed to comply with the hearing rule in relation to the method decision. The Judge reminded Mr Russell‑Taylor during the course of his final submissions of the submission of counsel for the State to the effect that Dr Tyne had considered the solicitor’s letter of 23 August 2007 and had decided that it was appropriate to continue with a merits‑based assessment. He asked Mr Russell‑Taylor whether he wished to make any submission on that topic. Although Mr Russell‑Taylor gave an affirmative response, his subsequent submissions did not really address the question.
Summary of Consideration of the Issue at Trial
In summary, compliance with the hearing rule issue in relation to the method decision was not raised as a discrete issue on the pleadings; some of the evidence adverted to the consideration given by Dr Tyne to the solicitor’s letter of 23 August but not in a way to indicate that the adequacy of that consideration was in issue; the Judge did raise the issue in final addresses but, in the face of a protest that the issue did not arise for determination, did not indicate that he may decide the case on that basis; the Judge did not invite submissions on the adequacy of Dr Tyne’s consideration; the Judge did not enquire whether the defendants had led all the evidence they wished on the topic; and even when prompted by the Judge, Mr Russell‑Taylor did not indicate reliance on a failure to comply with the hearing rule in the method decision.
In these circumstances, I consider that the appellants were not on notice that the method decision may be impugned on procedural fairness grounds. In this way they were themselves denied procedural fairness.
Discretionary Considerations
Of course, not every departure from the rules of procedural fairness at trial will entitle the aggrieved party to have the judgment set aside or a new hearing ordered. An appellate court will not do so if such a course would be futile. This means that it is sometimes necessary for an applicant to show that if it had been afforded procedural fairness the outcome may have been different. The High Court discussed this issue in Stead v State Government Insurance Commission[12] and said:
For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial. … [W]hen the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice is relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.[13]
[12] (1986) 161 CLR 141.
[13] Ibid at 145-6.
The present appellants led no evidence on the appeal as to any further evidence which could have been led from Dr Tyne had they or the State been on notice at trial that compliance with the hearing rule in the method decision was in question. They contended that it was not necessary to do so. For the reasons which follow, I am satisfied that that contention should be upheld.
The content of the hearing rule is not fixed. What is required depends upon the circumstances of the given case. In Reg v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group,[14] the High Court said:
But it must be borne in mind that these principles are not to be found in a fixed body of rules applicable inflexibly at all times and in all circumstances. Tucker LJ said in Russell v Duke of Norfolk: “The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth”. This passage was approved by the Privy Council in University of Ceylon v Fernando, and was used by Kitto J in Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation. There his Honour observed: “What the law requires in the discharge of a quasi-judicial function is judicial fairness … What is fair in a given situation depends upon the circumstances”. We agree with the forgoing statements of the relevant law.[15]
[14] (1969) 122 CLR 546.
[15] Ibid at 552-3.
Accordingly, had Dr Tyne’s compliance with the hearing rule been an issue in the trial, one would have expected the parties to have adduced evidence and made submissions as to the content of the rule in the consideration of Mr Russell‑Taylor’s objection.
Secondly, the passage from the cross‑examination of Dr Tyne quoted earlier in these reasons indicates that some attention was given to Mr Russell‑Taylor’s objection by the Panel. Dr Tyne did not elaborate on that consideration. It is, however, plain from his answer to Mr Russell‑Taylor’s questions that he could have given more evidence on the topic. In these circumstances, this Court should be slow to conclude that provision of the opportunity to address the issue at trial, whether by evidence or submissions, could have made no difference.
Inferences from an Absence of Evidence
The Judge’s decision that Dr Tyne had failed to observe the hearing rule was a matter of inference. That inference was, to a significant extent, drawn from an absence of evidence. The conclusion that compliance with the hearing rule in the method decision had not been an issue in the trial renders problematic a decision on this basis. That is because it cannot be assumed that the defendants, and in particular the State, had led all the evidence which was available.
In deciding that there had been non‑compliance with the hearing rule, the Judge considered first what he described as the “objective contemporaneous documentary evidence”; then the oral evidence; and then the enquiries which a reasonable decision‑maker in Dr Tyne’s position would have undertaken if he or she had considered Mr Russell‑Taylor’s objection to the departure from the first come - first served basis of determination.
As to the contemporaneous documentary evidence, the Judge noted the absence of any reference in the minutes of the meeting of the Panel on 31 August 2007 of Mr Russell‑Taylor’s objection to the proposed method of determination; the absence of any reply to his solicitor’s letter of 23 August 2007; and the absence of any reference to the submission and a decision on the topic in PIRSA’s letter to Mr Russell‑Taylor of 3 October 2007 in which it informed him of the Panel’s recommendation and the Department’s proposed action.
In relation to Dr Tyne’s oral evidence, the Judge referred to the passage quoted above in [59] above and recorded Dr Tyne saying that “the intent (as opposed to the content) of the letter was discussed during the opening of the Panel meeting”. The Judge then continued:
[220]Dr Tyne did not at any point in his evidence say that he (or the Panel) made a decision whether or not to proceed with a merits assessment as opposed to following a first come first served approach. Nor did he say that consideration was given to the merits of the objections made in the letter with a view to making a decision on how to proceed (as opposed to merely discussing the intent of the letter). This is confirmed by the minutes of the Panel meeting, which make no mention of this topic.
It can be seen that in this passage the Judge was relying on an absence of evidence. The Judge then made the following assessment of Dr Tyne’s evidence:
[222] With this in mind, I assess Dr Tyne’s evidence as follows.
1.The minutes of the Panel meeting set out that Dr Tyne explained at the outset the function of the Panel as being “to assess competing applications… provide expert assessment and advice to [Dr Tyne]… assess using a rigorous process [namely applying the 6 defined assessment criteria and a rating for each criterion].” Dr Tyne described this in his evidence as “there’s a clear indication of the level playing field process that the Panel went through in terms of the objective criteria that all of the submissions were assessed under.”
2.Dr Tyne saw his role on the Panel as being “about objective assessment of the competing applications”, “the Panel were a group of experts working within the framework of the criteria that was set”,[16] “it was my job to ensure that the Panel members focussed objectively on the merit selection or merit assessment criteria” and “the Panel constitutes, and I chaired the Panel to assess against the criterion that PIRSA had established the applications as they stood on their own merits.”
3.Given that the Panel was convened for its expertise in and for the purpose of assessing the merits, it is not inherently likely that the Panel (as opposed to Dr Tyne himself) would have been seen as the appropriate vehicle to make a decision on whether to use a completely different method of selection.
4.Dr Tyne was brought in to undertake and oversee the merits assessment process without any involvement of Dr Heithersay or Ms Freeman because they both had been recently joined as defendants to this action at that point and it was considered prudent that they not take a role for that reason.
5.The Department had been proceeding ever since December 2005 on the assumption that the applications would ultimately be assessed using some form of merit assessment as opposed to first come first served and a very significant momentum to this effect had developed by the time that Dr Tyne was brought in to consider the competing applications in August 2007. It might be expected in those circumstances that Dr Tyne simply assumed that he was expected to conduct a merit assessment without delving into a reconsideration of whether a first come first served basis should be used instead. His evidence was consistent with this assumption.
6.Dr Tyne had not had any previous involvement in the licence applications the subject of this action and had not had any involvement in or detailed knowledge of the cancellation or invalidating the cancellation of the Goldus group licences.
7.Dr Tyne did not seek any legal advice about the letter of 23 August 2007.[17] Any consideration of the merits of the objections set out in the letter would inevitably have entailed calling for legal advice. By contrast, Dr Tyne gave evidence that he considered Mr Russell‑Taylor’s letter to him dated 11 October 2007 and advised his Land Access Branch and the Mining Registrar staff to initiate legal advice on the content of the letter.
8.Dr Tyne said that the Panel did not consider previous matters concerning cancellation of the licences. Any consideration by Dr Tyne at the Panel meeting of the merits of the objections by Mr Russell-Taylor would inevitably have addressed the cancellation of the Goldus group licences.
9.Dr Tyne gave evidence in chief that he was not aware of any proposal that the Goldus group be given additional weighting. Any consideration of the merits of Mr Russell-Taylor’s objections would almost inevitably have disclosed the proposal to give the Goldus group a weighting in recognition of their cancelled licences.
10.There was no reply by the Department to the letter dated 23 August 2007 and the subsequent letter sent by Dr Tyne dated 3 October 2007 made no reference to it or the issues raised in it. By contrast, Dr Tyne gave evidence that he considered Mr Russell‑Taylor’s letter to him dated 11 October 2007 and advised his Land Access Branch and the Mining Registrar staff to initiate an appropriate form of response to that letter.
(References omitted)
[16] T620.
[17] T614.
The Judge then concluded:
[223]I conclude that Dr Tyne as the relevant decision-maker did not give consideration to Mr Russell-Taylor’s objections and submissions contained in his solicitor’s letter dated 23 August 2007, nor did he turn his mind to or make a decision as to whether or not to depart from the first come first served practice and proceed with the merits assessment process instead. All of the evidence points to this conclusion, including the contemporaneous objective documentation, the absence of any evidence from Dr Tyne that he so acted (as opposed to merely discussing the intent of the letter) and the 10 matters considered in the previous paragraph.
The Judge went on to consider the steps which a decision‑maker in Dr Tyne’s position would or may have undertaken in considering Mr Russell‑Taylor’s objection to the Department’s proposed method of determination and noted that Dr Tyne had not taken any of those actions.
I consider that there is some force in the Judge’s reasoning on this topic if the matters to which he referred are considered in isolation. The difficulty, however, is that, for the reasons given earlier, the evidence of Dr Tyne led by the State was not directed to this issue. It was in the main directed to the question of whether the Panel had engaged in a fair and objective appraisal of the merits of the respective competing applications. Nor did counsel for the present appellants or Mr Russell‑Taylor cross‑examine Dr Tyne on the issue. In fact, Dr Tyne was never asked directly what consideration, if any, he gave to Mr Russell‑Taylor’s objection to the departure from the first come - first served basis of determination.
In these circumstances, the drawing of inferences from an absence of evidence is, in my respectful opinion, unsound. As the author of Cross on Evidence has observed:
What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts “requiring an answer”. If there is no issue between the parties on a matter, there is nothing to answer; and if there is an issue between them, but the party bearing the burden of proof has tendered no evidence of it, the opponent is not required to answer.[18]
(Citations omitted) (Emphasis added)
[18] 8th Australian Edition at 42, [1215]. This statement was made in the context of a discussion of the rule in Jones v Dunkel (1959) 101 CLR 298 but is also pertinent in the present context.
The absence of evidence from Dr Tyne on the topic is not a matter for which the State or the present appellants should bear responsibility. It was not necessary for them to endeavour to anticipate every possible form of challenge which may be made to the decisions to grant exploration licences to Mr Russell‑Taylor’s competitors (whether pleaded or not) and then to negate the basis for such a challenge.
For these reasons, I consider that the appeal should be allowed.
Mr Russell‑Taylor’s Purported Appeal
On 27 January 2012, Mr‑Russell‑Taylor lodged for filing in the Registry of the Court a document entitled “Notice of Appeal”. The document indicated that Mr Russell‑Taylor wished to appeal against “the entire text of the judgment” of the trial Judge.
Acting under r 53(2) of the Supreme Court Civil Rules 2006, Stanley J directed the Registrar to reject the document for filing on the basis that it constituted an abuse of the Court’s process within the meaning of that rule. Stanley J considered that the document did not comply with the requirements in the Rules in a number of respects, including by failing to contain a coherent statement of grounds of appeal.
The document entitled “Notice of Appeal – Second Amended” lodged on 8 May 2012 maintained the “grounds of appeal” contained in the notice of appeal previously rejected by the Court,but also indicated that Mr Russell‑Taylor wished to appeal against the decision of the trial Judge to continue the trial without witnesses whom Mr Russell‑Taylor had sought to subpoena. Those witnesses were Mr Rann, the former Premier, Mr Holloway, the former Minister for Mines, Mr Kenyon, a Minister in the present State government and a Mr Lewis who was said to control, at least at some times, the appellants.
The Court directed, again acting under r 53(2), that the document not be received for filing. That was in part because the document was for the most part a repetition of the document which the Court had previously directed be rejected for filing; in part because the document did not purport to be an appeal against final orders or orders of a kind which were amenable to appeal; and in part because Mr Russell‑Taylor sought a significant extension of time within which to commence an appeal on the basis that he had miscalculated the time for filing a notice of appeal, despite the fact that he had plainly been aware as at 27 January 2012 of the 21 day limitation period.
In these circumstances, it is not necessary for the Court to address the matters raised by the document entitled “Notice of Appeal – Second Amended”.
Conclusion
For the reasons given above, I consider that the appeal should be allowed. This makes it unnecessary to consider the remaining rounds of appeal.
I would set aside each of the orders made by the Judge including the consequential costs orders and substitute an order dismissing the application for judicial review.
PEEK J. I agree with the orders proposed by White J and with his reasons.
STANLEY J: I have read the reasons for judgment of White J. I agree with His Honour’s reasons and the orders he proposes.
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