Re Warden P Roth; [No 2]
[2011] WASC 343
•7 DECEMBER 2011
RE WARDEN P ROTH; EX PARTE CAZALY IRON PTY LTD [No 2] [2011] WASC 343
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 343 | |
| 07/12/2011 | |||
| Case No: | CIV:1850/2011 | 7 DECEMBER 2011 | |
| Coram: | BEECH J | 7/12/11 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Show cause order made absolute | ||
| B | |||
| PDF Version |
| Parties: | CAZALY IRON PTY LTD |
Catchwords: | Administrative law Procedural fairness Whether applicant had a right to be heard prior to a decision that its applications for exploration licences not be included in a ballot under s 105A Mining Act 1978 (WA) Whether warden's conduct was contrary to the requirements of procedural fairness Whether in the circumstances procedural fairness required the warden to reveal his tentative conclusion that the applications did not comply with the initial requirements Whether warden's conclusion could not reasonably have been anticipated |
Legislation: | Mining Act 1978 (WA), s 58, s 105A |
Case References: | Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 Re Warden P Roth; Ex parte Cazaly Iron Pty Ltd [2011] WASC 226 Stead v State Government Insurance Commission (1986) 161 CLR 141 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
CAZALY IRON PTY LTD
Applicant
Catchwords:
Administrative law - Procedural fairness - Whether applicant had a right to be heard prior to a decision that its applications for exploration licences not be included in a ballot under s 105A Mining Act 1978 (WA) - Whether warden's conduct was contrary to the requirements of procedural fairness - Whether in the circumstances procedural fairness required the warden to reveal his tentative conclusion that the applications did not comply with the initial requirements - Whether warden's conclusion could not reasonably have been anticipated
Legislation:
Mining Act 1978 (WA), s 58, s 105A
(Page 2)
Result:
Show cause order made absolute
Category: B
Representation:
Counsel:
Applicant : Mr S K Dharmananda SC & Ms S V van den Hoogen
Solicitors:
Applicant : DLA Piper Australia
Case(s) referred to in judgment(s):
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149
Re Warden P Roth; Ex parte Cazaly Iron Pty Ltd [2011] WASC 226
Stead v State Government Insurance Commission (1986) 161 CLR 141
(Page 3)
- BEECH J:
Introduction
1 The applicant lodged applications for exploration licences. By letter of 29 November 2010, the warden determined that the applicant's applications did not meet the initial requirements under s 58 of the Mining Act 1978 (WA) (the Act) and consequently would be excluded from the ballot under s 105A of the Act.
2 On 30 August 2011, I granted an order nisi requiring the warden to show cause why that decision should not be quashed on the grounds that the warden failed to afford the applicant procedural fairness: Re Warden P Roth; Ex parte Cazaly Iron Pty Ltd [2011] WASC 226.
3 Since the grant of the order nisi, the applicant has filed a further affidavit. The other parties who have applied for exploration licences over the same or overlapping ground have been served. No party appeared to oppose the applicant's case.
4 At the hearing, I announced my decision that the order nisi be made absolute, for reasons to be published. These are my reasons.
5 These reasons draw heavily from my reasons for granting the order nisi.
The Mining Act 1978
6 Section 58 sets out requirements for an application for an exploration licence. As at 29 November 2010, s 58(1) provided as follows:
An application for an exploration licence -
(a) shall be in the prescribed form;
(b) shall be accompanied by a statement specifying -
(i) the proposed method of exploration of the area in respect of which the licence is sought;
(ii) the details of the programme of work proposed to be carried out in such area;
(iii) the estimated amount of money proposed to be expended on the exploration; and
(iv) the technical and, subject to subsection (1aa), financial resources available to the applicant;
(Page 4)
- (c) shall be accompanied by the amount of the prescribed rent for the first year of the term of the licence or portion thereof as prescribed;
(d) shall be lodged at the office of the mining registrar; and
(e) shall be accompanied by the prescribed application fee.
7 The warden found that the applicant's applications did not comply with the requirement in s 58(1)(b)(iv) to specify the financial resources available to the applicant. I will refer to this requirement as the financial resources initial requirement.
8 Section 105A governs the determination of priorities between applicants for various tenements including exploration licences. Section 105A(1), s 105A(3) and s 105A(4)(a) provided as follows:
(1) Subject to section 111A, where more than one application is received for a mining tenement (other than a miscellaneous licence) in respect of the same land or any part thereof, the applicant who first complies with the initial requirement in relation to his application has, subject to this Act, the right in priority over every other applicant to have granted to him in respect of that land or part the mining tenement to which his application relates.
…
(3) Where in respect of any land the warden is satisfied that 2 or more applicants complied with the initial requirement in relation to their applications at the same time, priority shall, unless written agreement is concluded by the applicants and lodged at the office of the mining registrar within the prescribed time, be determined by ballot conducted by the warden on a date to be determined by the warden and notified to the applicants.
...
(4) In this section a reference to compliance with the initial requirement in relation to an application is a reference -
(a) in the case of an application for an exploration licence, to lodging that application at the office of the mining registrar.
(Page 5)
The facts
10 In my decision on the order nisi, I summarised the facts as follows:
At 8.30 am on 20 November 2009, the applicant lodged application E47/2189. Attached to the application was a page described as a 'Financial Ability Statement', comprising a balance sheet for Cazaly Resources Ltd as at 30 June 2008. The sheet included a handwritten note that the applicant is a wholly owned subsidiary of Cazaly Resources Ltd.
At the time application E47/2189 was lodged, the 2008 balance sheet was not the most recent for Cazaly Resources Ltd. The 2009 annual report, including its balance sheet, had been lodged with the Australian Stock Exchange in September 2009. Ms Mills says in her affidavit that she was informed by Mr McMahon, a tenement consultant to the applicant, that the most recent balance sheet was not included in the supporting documentation due to an administrative error.
Also on 20 November 2009 at 8.30 am, various third parties lodged applications E47/2191, E47/2193, E47/2194, E47/2197, E47/2198, E47/2200 and E47/2201 in respect of the same or overlapping ground.
At 8.30 am on 30 April 2010, the applicant lodged applications E47/2351 and E47/2352. Each application was accompanied by a copy of the balance sheet of Cazaly Resources Ltd as at 30 June 2009, with the statement that the applicant is a wholly owned subsidiary of Cazaly Resources Ltd. The balance sheet of Cazaly Resources Ltd showed net assets of the group of just under $14 million.
At the time that these tenements were lodged, the balance sheet of 30 June 2009 was the most recent financial statements for Cazaly Resources Ltd.
Also at 8.30 am on 30 April 2010, other third parties lodged applications E47/2345, E47/2346, E47/2347, E47/2348, E47/2353 and E47/2354 in respect of the same or overlapping ground.
By letter of 29 November 2010 to the applicant, the warden acknowledged receipt of the application for exploration licence no 47/2189. The letter stated that:
(a) a number of other competing applications had been received at the same time;
(b) accordingly, ballots would be needed to be conducted to determine priority;
(c) in assessing the applications to ensure all applications satisfied the initial requirements, the warden had 'noted' that the applicant's application fails to meet the initial requirements as it does not specify the financial resources available to the applicant;
(Page 6)
- (d) a copy of the applicant company's balance sheet as at 30 June 2008 is not considered sufficient; and
(e) as the application did not comply with the initial requirements contemporaneously with the competing applications, it must be excluded from the ballot.
The warden wrote a letter in substantially identical terms in relation to applications 47/2351 and 47/2352. The only material difference in the letters is that the letter regarding these latter applications referred to the balance sheet as at 30 June 2009 as not being considered sufficient.
Prior to 29 November 2010, the warden did not seek any further information from the applicant or intimate that he considered that the applicant's applications did not or might not comply with the initial requirements as regards specifying the financial resources available to the applicant.
By letter of 3 December 2010, the applicant's tenement agent wrote to the mining registrar in response to the warden's letter of 29 December 2010. The applicant's agent's letter stated that:
(a) the applicant considered the warden's letter as an expression of intention to exclude the applicant's applications from the ballot, not as decisions to exclude;
(b) the applicant had previously applied for and been granted exploration licences in the same form as these applications; and
(c) the applicant considered that, as a matter of procedural fairness, it was entitled to an explanation of why the balance sheet with the application failed to meet the financial resources initial requirement and to an opportunity to make submissions as to why the applications should be included in the ballot.
The letter concluded by stating that if the applicant were not given this opportunity, it would apply to the Supreme Court to quash the ballot decision on the ground that the applicant had not been afforded procedural fairness.
A letter in the same terms was written in relation to each of the three applications.
The mining registrar responded on behalf of the warden by letter of 12 January 2011. By this letter, the warden:
(a) stated that his earlier letter was not an expression of intention to exclude from the ballot, it was a decision that the applicant did not comply with the initial requirements in s 58(1)(b)(iv) of the Mining Act;
(Page 7)
- (b) stated that the question of whether the applicant had complied with the initial requirements is a question of fact and solely an issue for the warden, referring to the unreported decision of the Full Court of the Supreme Court in Ex parte Aberfoyle Resources Ltd (Unreported, WASCA, Library No 7612, 19 April 1989);
(c) asserted that the applicant was not entitled to any explanation or to make submissions on why the information provided should be accepted as sufficient;
(d) stated that the requirement in s 58(1)(b)(iv) is for the applicant to specify the financial resources available to it as at the date of the application, and that information as to the applicant's financial situation nine months before the application did not satisfy that requirement; and
(e) stated that information that was not more than six months old would be accepted.
The ballots in respect of the land covered by the applicant's three applications have not occurred. That process has been put on hold pending the applicant's application in these proceedings [9] - [22].
11 The applicant also relies on the affidavit of Mr Shannon McMahon sworn 13 October 2011. Mr McMahon is the principal of McMahon Mining Title Services Pty Ltd (MMTS). MMTS provides tenement management services to a range of clients, including the group of companies of which the applicant is a member. I will outline the effect of Mr McMahon's evidence later in these reasons.
The applicant's case
12 The applicant's case is that:
(1) the decision as to whether the applicant's application for exploration licences simultaneously satisfied the initial requirements with the other applications attracts a duty of procedural fairness;
(2) in making the determination in the letter of 29 November 2010, without seeking further information or submissions from the applicant, the warden acted in breach of the duty of procedural fairness; and
(3) there is no discretionary reason to refuse the grant of relief.
13 As will appear, I accept these three propositions.
(Page 8)
Did a duty of procedural fairness arise?
14 As I explained in the order nisi decision:
(a) I am satisfied that the decision as to whether the applicant's application for an exploration licence simultaneously satisfied the initial requirements with the other applications (thereby engaging s 105A) sufficiently affects the applicant's rights and interests to attract a duty of procedural fairness; and
(b) the real question is about the content of the duty.
The content of the duty of procedural fairness - general principles
15 I repeat the outline of general principles I gave in the order nisi decision [30] - [36]:
Procedural fairness is a practical concept. The purpose of the law of procedural fairness is to avoid practical injustice: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 [37]; Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403 [272], [329]; Apache Northwest Pty Ltd v Agostini [No 2] [2009] WASCA 231 [213].
The content of the requirements of procedural fairness depends on the statutory context and all of the circumstances of the case. Martin CJ explained the position in Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149 [3] - [4] as follows:
'It is well established that the precise content of the requirements of procedural fairness in any particular case will depend critically upon the statutory framework within which the relevant power falls to be exercised, and the facts and circumstances of the particular case - see SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152. Because of the large variety of statutory frameworks in which the obligation to provide procedural fairness arises, and the infinite variety of factual circumstances in which the determination of the precise content of the requirements of procedural fairness might arise, it is impossible to lay down a universally valid test or norm which can be applied to determine whether procedural fairness has been provided in each and every case - see Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475, at 503 - 504, (cited with approval in SZBEL).
A court required to determine whether a decision maker has departed from the requirements of procedural fairness must therefore analyse all facts and circumstances relevant to the purported exercise of the power, viewed in the context of the
- statutory framework conferring the relevant power, for the purposes of ascertaining whether there has been practical injustice in the particular case - Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37].'
- See also Apache Northwest [213].
In Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576, the Full Court of the Federal Court said:
'Where the exercise of statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question (591 - 592).'
This statement of principle has been applied in many cases. It was referred to with evident approval by Buss JA in Apache Northwest [217].
In this case, the applicant relied on the statement that a decision-maker is required to advise of any adverse conclusion that is not obviously open on the known material.
In SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 [30] - [32] the High Court said that caution was needed in applying the principles stated in that passage. It is wrong to assume that the question of what was required by procedural fairness involves a choice between a dichotomy of two categories (conclusions not obviously open on the known materials; and mental processes of decision-making). Those two categories do not necessarily cover the universe of possibilities. Moreover, such an approach may distract attention from the fundamental principle. The fundamental principle is that an opportunity to be heard would 'ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material' [32].
(Page 10)
- In Apache Northwest, Buss JA stated (Wheeler & Newnes JJA agreeing [1]) that, generally, procedural fairness does not require the decision-maker to reveal a proposed conclusion to a person to whom procedural fairness must be accorded but, in a particular case, it may be necessary for an adverse conclusion to be disclosed with an opportunity to make submissions, if the proposed conclusion could not reasonably have been anticipated: [217] - [218].
16 The essence of the applicant's case is that, in the circumstances, the conclusion to which the warden came was one that could not reasonably have been anticipated, so that procedural fairness required its disclosure to the applicant.
Could the warden's decision have reasonably been anticipated?
17 For the following reasons, I am satisfied that the warden's conclusion about the financial resources initial requirement was one that could not reasonably have been anticipated, and should have been disclosed by the warden in affording procedural fairness to the applicant.
18 First, the balance sheet of Cazaly Resources Ltd, the holding company of the applicant, revealed a net equity of almost $14 million. The expenditure requirements for each of the exploration licences was $20,000 or less.
19 Secondly, the Mines Department Guidelines include a statement to the following effect:
If the applicant is a company it must provide a copy of its current annual report, or its financial statement (eg copies of the relevant pages from the annual report) or an assurance from its accountant or external auditor of its financial capacity to fund the proposed work program. If expenditure is to be provided by an applicant's parent company or subsidiary, an assurance as outlined above must be provided by that company's or subsidiary's accountant or external auditor of its financial capacity.
20 Thirdly, Mr McMahon's company, MMTS, had prepared and lodged hundreds of applications for exploration licences each year for some years leading up the lodgment of these applications. Where the applicant for an exploration licence was a subsidiary of a listed company, MMTS's standard practice, in order to satisfy the financial resources initial requirement, was to lodge copies of the financial statements from the annual report of the parent company and its controlled entities, with a notation that the applicant is a wholly owned subsidiary of the parent company.
(Page 11)
21 Prior to lodging these applications, MMTS had followed this standard practice in respect of a number of applications on behalf of Cazaly Resources and its subsidiaries.
22 Prior to the letter of 29 November 2010, none of the applications for exploration licences prepared by MMTS, on behalf of Cazaly Resources Ltd or its subsidiaries, or any other listed company, or a wholly owned subsidiary of a listed company, had been refused or excluded from a ballot on the grounds that the financial information was insufficient or too old, or on the ground that the financial statement was that of the parent company and its group, rather than the subsidiary.
23 The scheme of the Act is to give the warden a power, not a duty, to request further information. When the warden exercises that power, the applicant has a duty to respond to the request.
24 In the context of that scheme, and in the circumstances I have outlined, I am satisfied that:
(a) the conclusion that the material provided did not meet the financial resources initial requirement was one that could not reasonably have been anticipated by the applicant; and
(b) procedural fairness required the warden to inform the applicant of his provisional view to that effect to permit the applicant to make submissions before coming to a final conclusion.
25 For those reasons, in the circumstances I have outlined, I am satisfied that in declining to permit the applicant an opportunity to make submissions on whether it had met the financial resources initial requirement, the warden failed to afford procedural fairness to the applicant.
Discretion
26 It is only in rare cases where it can be said that the grant of relief would be futile because the opportunity to make submissions could not possibly have produced a different result: Stead v State Government Insurance Commission (1986) 161 CLR 141, 147. This is not such a case. There is no discretionary ground to refuse relief.
Conclusion
27 For these reasons, I made the order absolute.
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