Russell-Taylor v State of South Australia

[2011] SASC 238

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

RUSSELL-TAYLOR v STATE OF SOUTH AUSTRALIA & ORS

[2011] SASC 238

Judgment of The Honourable Justice Blue

21 December 2011

ADMINISTRATIVE LAW - PREROGATIVE WRITS AND ORDERS - CERTIORARI - GROUNDS FOR CERTIORARI TO QUASH

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - PROCEDURAL FAIRNESS - HEARING

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - PROCEDURAL FAIRNESS - EXISTENCE OF OBLIGATION - LEGITIMATE EXPECTATIONS

The plaintiff lodged applications for exploration licences – plaintiff contended he was entitled to priority assessment under the department’s first come first served practice – decision made of willingness to grant licences instead to three companies who lodged applications later in time – licenses ultimately granted to two of those companies – plaintiff seeks judicial review of relevant decisions.

Whether the Minister has power to decide application on a merits basis – whether the first come first served practice could be departed from – whether plaintiff afforded procedural fairness – whether plaintiff provided with a hearing – whether plaintiff’s submissions considered in making relevant decisions – whether plaintiff denied an opportunity to bring forward evidence in support of applications - consideration of the nature of the orders sought by the plaintiff.

Held: Minister had power to grant licences other than to the first applicant – Minister had power to make a merits based assessment – plaintiff was given opportunity to submit evidence in support of application - plaintiff had a legitimate expectation in respect of the first come first served practice – Minister’s delegate did not consider whether practice should be departed from but simply proceeded with a merits based assessment – decision of willingness to grant licences and grant of licences to competitors void - Minister directed to reconsider applications according to law.

Mining Act 1971 (SA) s 13, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 30A, 30AA, 31, 33, 34, 35A, 38, 80; Mining Regulations 1998 (SA) reg 12, 44, 55, 56, 57; Environment, Resources and Development Court Act 1993 (SA) s 5, 33; Trade Practices Act 1975 (Cth) s 45, 80, referred to.
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; FAI Insurances Ltd v Winneke (1982) 151 CLR 342 ; Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 ; R v Criminal Injuries Compensation Board ex parte Lain [1967] 2 QB 864; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1, applied.
R v Newham London Borough Council [2002] 1 WLR 237; R v North and East Devon Health Authority; Ex parte Coughlan [2001] QB 213; R v Secretary of State for Education and Employment; Ex parte Begbie [2000] 1 WLR 1115; R v Secretary of State for the Home Department; Ex parte Hindley [2001] 1 AC 410, not followed.
Attorney-General (NSW) v Quin (1990) 170 CLR 1; Boral Resources (SA) Ltd v Matthews (2006) 94 SASR 411; Byrnes v The Queen (1999) 199 CLR 1; Craig v South Australia (1995) 184 CLR 163; Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273; Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369; Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64; Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150, considered.

RUSSELL-TAYLOR v STATE OF SOUTH AUSTRALIA & ORS
[2011] SASC 238

Civil

1. BLUE J:   The plaintiff, Mr Russell-Taylor, lodged with the Mining Registrar two applications for exploration licences in December 2004.

2. In January 2008 (and Mr Russell-Taylor argues in October 2007) a delegate of the Minister made a decision or decisions of willingness to grant exploration licences to three companies (Mintech, Mawson and PepinNini) who had lodged competing applications after Mr Russell-Taylor in respect of areas the subject of their applications, and to Mr Russell-Taylor in respect of the balance.

3. Mr Russell-Taylor seeks judicial review of those decisions and of certain intermediate decisions leading to them.

   The Parties

   The Goldus group

4. Mintech Resources Pty Ltd (“Mintech”) was granted exploration licence number 2799 (“EL2799” or “the Mintech licence”) in February 2001.  Subsequently, Mintech became a subsidiary of Goldus Pty Ltd (“Goldus”).

5. Goldus was granted exploration licence numbers 2822, 2823 and 2824 in July 2001. 

6. Mawson Gold NL (“Mawson”) was granted exploration licence number 3060 (“EL3060” or “the Mawson licence”) in February 2003. Mawson was at all material times a subsidiary of Goldus.

7. Goldus, Mintech and Mawson all form the Goldus group, and Mr Peter Lewis was a director of each at all material times.

   The plaintiff

8. Mr Russell-Taylor has been engaged in the mining industry for most of his working life, having been employed by Delhi Petroleum in various roles for 12 years and by Amdel for 3 years.  He then spent 12 years as a private consultant in quarrying.

9. In July 2002, Mr Russell-Taylor was appointed chief executive officer of various companies in the Goldus group.  After Mawson became a subsidiary of Goldus, Mr Russell-Taylor was appointed a director of Mawson and became its chief executive officer.  In April 2004, Mr Russell-Taylor resigned from these positions.

   The first and second defendants

10. The second defendant, Paul Holloway, was at all material times the Minister for Mineral Resources Development (“the Minister”) in the first defendant, the State of South Australia.  The Minister was responsible for the administration of the Mining Act 1971 (SA) (“the Act”).

11. The Minister was supported by a Division of the Department of Primary Industries and Resources SA (“the Department”), namely the Minerals Energy and Resources Division (“the Division”). Dr Paul Heithersay was at all material times the Executive Director of the Division (“Executive Director”). In addition, he held the statutory position of Director of Mines under s 6 of the Act (“the Director of Mines”).

12. The Mineral Resources Subdivision (“the Subdivision”) was a subdivision of the Division.  Dr Edward Tyne was the Director of Mineral Resources (“the Director”) from the end of April 2005 onwards.

13. The Land Access Branch was a branch within the Subdivision.  Prudence Freeman was at all material times the Manager of the Land Access Branch (“the Manager”).

14. The Mineral Tenements Program was a group within the Land Access Branch. Helen Thomas was at all material times the Leader of the Program. In addition, Ms Thomas held the statutory position of Mining Registrar under s 13 of the Act.

15. Under the supervision of the Mineral Tenements Leader was the Exploration Co-ordinator. Susan Watson at all material times held that position and was also a Deputy Mining Registrar under s 13 of the Act.

16. The Minister had given general delegations pursuant to s 12 of the Act of the powers and functions vested in or conferred on the Minister under the Act to:

    1.the Executive Director and Director of Mines; and

    2.the Director.

17. From time to time, the following persons acted in higher positions:

    1.Ms Freeman acted as Executive Director and Director of Mines in the week before Christmas 2004; and

    2.Ms Watson acted as Mining Registrar in February 2005 and July to August 2007.

18. There are no longer any third and fourth defendants in the action.  They were originally Dr Heithersay and Ms Freeman.

19. In these reasons, I refer to the State and the Minister (including his delegates) collectively as “the Crown”.

    The fifth and sixth defendants

20. Mintech and Mawson were joined on 16 June 2011 as defendants to the action on their own application and over the opposition of the plaintiff.

    Witnesses

21. The plaintiff called five witnesses.

22. The plaintiff gave evidence by way of affidavit and oral evidence.  He principally addressed his dealings with the Department from December 2004 to January 2008.

23. David Watkins is a geologist who had once been a director and shareholder of Mintech and had been engaged by the Goldus group as a consultant geologist.  During the second half of 2004, Mr Watkins expressed to the Department interest in an area covered by the Goldus exploration licence 2824. As a result, he was informed when the Goldus group’s licences were cancelled in December 2004 and given an opportunity to apply for an exploration licence over those areas. 

24. Mark Pickard is a participant in the mining industry and engaged or employed Mr Russell-Taylor from time to time.

25. Dr Heithersay and Ms Freeman gave evidence on subpoena issued by the plaintiff of relevant dealings from December 2004 to January 2008.

26. The first and second defendants called Dr Tyne, Ms Thomas and Ms Watson.  They gave oral evidence and Ms Thomas and Ms Watson gave evidence by affidavit of relevant dealings from December 2004 to January 2008.

27. With one exception, there was no challenge by any party to the credit of any witness. The exception is that the plaintiff challenged the credit of Ms Thomas.

28. First, he submitted that Ms Thomas’ evidence that she had made the decision to cancel the 5 Goldus group licences in December 2004 was inconsistent with the evidence of Dr Heithersay and Ms Freeman that they had made the decision.  I do not consider there was any inconsistency as all 3 witnesses gave evidence that Ms Thomas made the decision to recommend cancellation, but she did not have the authority to make the decision to cancel and that decision was actually made by Dr Heithersay and Ms Freeman.

29. Secondly, the plaintiff submitted that Ms Thomas said that the decision to settle the ERD appeal was not made at a single point but was an evolution, whereas the plaintiff contended that it was made at a single point being the point at which the Goldus group obtained documents from the Crown pursuant to a Freedom of Information request.  It is true that Ms Thomas was vague in her evidence about the point or points at which the decision to settle was made and what may have prompted it, but I consider that this reflects the vagueness of her memory of events 6 years ago rather than her honesty.

30. Finally, as the action involves events which occurred several years ago, the accuracy and completeness of the recollection of the witnesses was imperfect in many respects.

    Licensing Regime under the Act

31. The Act governs exploration, prospecting for and mining of minerals in South Australia.

32. I describe below the regime which was in force between December 2004 and January 2008.

    Mineral tenement

33. A mineral tenement encompassed (relevantly) a mineral claim, a mining lease and an exploration licence.

    Miner’s right

34. Any person could apply for a miner’s right by making application in the prescribed form and paying the prescribed fee.[1]  A Mining Registrar was empowered to issue a miner’s right to such a person.[2]  A miner’s right authorised the holder to prospect for minerals and to peg out a mineral claim.[3]  The term of a miner’s right was 3 years, renewable every 3 years.[4]

    [1]    Mining Act 1971 (SA) s 20.

    [2]    Mining Act 1971 (SA) s 20.

    [3]    Mining Act 1971 (SA) s 22.

    [4]    Mining Act 1971 (SA) s 21.

    Mineral claim

35. A mineral claim could be pegged out by any holder of a miner’s right.[5]  After pegging out, the holder was required to lodge an application for registration within 30 days.[6]

    [5]    Mining Act 1971 (SA) s 22.

    [6]    Mining Act 1971 (SA) s 22, s 24 and s 25.

36. A Mining Registrar was obliged, under normal circumstances, to register a mineral claim upon receipt of a valid application.[7]  Effectively, the regime was that the first person pegging out a claim who validly applied for registration within 30 days was entitled to registration ahead of a person subsequently pegging out a claim.[8]

    [7]    Mining Act 1971 (SA) s 24(3).

    [8]    Boral Resources (SA) Ltd v Matthews [2006] SASC 121, (2006) 94 SASR 411 at [51]-[52] per Bleby J.

37. A mineral claim owner had exclusive rights including prospecting for minerals and carrying out such other exploratory operations as were approved by the Director of Mines, and applying for a mining lease in respect of the relevant area.

38. The maximum permissible area of a mineral claim was 250 hectares (2.5 square kilometres),[9] and the term of a mineral claim was 12 months from registration.[10]  A new mineral claim could not be pegged out over any part of a previous claim within 2 years of its lapse without the authority of the Warden’s Court.[11]

    [9]    Mining Act 1971 (SA) s 23, Mining Regulations 1998 reg 12.

    [10]   Unless an undetermined application for a mining lease had been made at the expiry of 12 months.

    [11]   Mining Act 1971 (SA) s 26 and s 27.

    Mining lease

39. The owner of a mineral claim could apply for a mining lease by making an application in the prescribed form and paying the prescribed fee.[12] The Minister had a discretion whether or not to grant a mining lease,[13] and the Minister had no power to grant a mining lease to a person who was not the owner of the mineral claim in respect of the relevant area.

    [12]   Mining Act 1971 (SA) s 25(1)(c) and s 35.

    [13]   Mining Act 1971 (SA) s 34, s 35A.

40. The maximum permissible area of a mining lease was 250 hectares.[14]  A mining lease could be granted for a term up to 21 years, with a right of renewal for up to 21 years.[15]

    [14]   Mining Act 1971 (SA) s 34(5), s 23(1), r 12.

    [15]   Mining Act 1971 (SA) s 38.

    Exploration licence

41. Essentially, the regime of miner’s right, mineral claim and mining lease dates back to the nineteenth century pursuant to the Act, its predecessor the Mining Act 1930, its predecessor the Mining Act 1893, and in turn its predecessor legislation.  The 1971 Act introduced a new form of tenement and an additional layer, namely the exploration licence.

42. Any person could apply for an exploration licence. The Minister determined the required form, and the application had to be accompanied by the prescribed fee, contain a map delineating the boundaries of the land the subject of the application and contain a statement addressing 5 matters prescribed by the Act.[16]

    [16]   Mining Act 1971 (SA) s 29.

43. The Minister had a discretion whether or not to grant an exploration licence in respect of the land the subject of an application.  One of the issues in this case is whether or not the Minister had a discretion, and if so the scope of that discretion, to choose between competing applicants for a licence over the same land.

44. If the Minister determined that he or she was willing to grant a licence, the Minister had to advise the applicant in writing of the terms and conditions proposed and the applicant had 21 days to notify acceptance or otherwise.[17]  At least 28 days prior to grant, notice of intention to grant the licence was required to be published in the Gazette and prescribed newspapers.[18]

    [17]   Mining Regulations 1998 (SA) reg 44.

    [18]   Mining Act 1971 (SA) s 28(5).

45. An exploration licence was subject to prescribed conditions and to such additional conditions as the Minister thought fit and specified in the licence.[19]  The holder of a licence was required to pay to the Minister, annually and in advance, a prescribed fee[20] calculated at the rate of $4.40 per square kilometre of the nominal area the subject of the licence.  Where the holder failed to comply with a condition of the licence, the Minister was empowered to cancel the licence.[21]  The licensee was given a right of appeal to the Environment, Resources and Development Court (“the ERD Court”) against a decision to cancel.[22]

    [19]   Mining Act 1971 (SA) s 30, Mining Regulations 1998 (SA) reg 56.

    [20]   Mining Act 1971 (SA) s 31, Mining Regulations 1998 (SA) reg 57, Schedule 3.

    [21]   Mining Act 1971 (SA) s 33(1).

    [22]   Mining Act 1971 (SA) s 33(2).

46. In general, if land was subject to an exploration licence, no other exploration licence or mineral claim could be granted in respect of the same land (without the consent of the holder, or the Warden’s Court being satisfied that the holder’s rights would not be materially diminished by the grant of the further licence or mineral claim).[23]  Similarly, where land was subject to an application for an exploration licence yet to be determined, in general no mineral claim could be registered over that land.[24]

    [23]   Mining Act 1971 (SA) s 80.

    [24]   Mining Act 1971 (SA) s 24(4).

47. The maximum permissible area of an exploration licence was 1,000 square kilometres or such greater area as the Minister approved.[25]  An exploration licence could be granted for up to 5 years, and could include rights of renewal such that the aggregate term did not exceed 5 years.[26]  Subsections 30A(4) and (4a) required an application for renewal to be in a manner and form determined by the Minister at least one month before the date of expiry and accompanied by the prescribed application fee and any information that the Minister may require. 

    [25]   Mining Act 1971 (SA) s 30AA.

    [26]   Mining Act 1971 (SA) s 30A.

    Background Facts

48. I make the following findings of fact (most of which are not in contention).

    Practice as to assessment of applications

49. It is common ground that the Minister and the Department at all material times had adopted a general practice that applications for exploration licences were treated on a first come first served basis (unless they were received on the same day). This was reflected in an information sheet issued by the Department entitled “Mineral Exploration Licences – General Conditions, Procedures and Information” dated July 2002 (“the Information Sheet”).

50. There were several aspects of the practice which were, at least initially, in dispute.  I make findings in relation to those aspects later.

    Mintech licence

51. On 19 February 2001, the Minister granted EL2799 to Mintech. The Mintech licence was granted for an initial term of 6 months and contained a clause that, if the licensee had complied with the licence conditions, the Act and the Regulations, it was entitled to renewal for a further term (up to an aggregate of 5 years) upon making application for renewal in accordance with s 30A of the Act. The Mintech Licence was renewed until 19 February 2004.

52. The Mintech Licence was subject to a number of conditions, including that:

    1. within 30 days after the end of each 6 month period, a summary report in the prescribed form be lodged with the Director of Mines;

    2. within 60 days after the end of each year, a technical report of work conducted during the year be lodged with the Director of Mines.

53. On 8 January 2004, Mintech requested a further renewal. It did not pay the prescribed renewal fee ($69).  The renewal was never processed by the Department or granted by the Minister.

54. On 19 February 2004, the annual fee of $1,298.95 for 2004/2005 became due and payable for the licence.  Mintech did not pay it.  On 5 April and 21 June 2004, the Department wrote to Mintech requesting payment of the annual fee and renewal fee.  On 30 July and 15 September 2004, the Department wrote to Mintech with a reminder that the annual and renewal fees had not been paid and warning that, if payment was not made within 7 days, the licence may be cancelled.

55. Mintech did not submit the annual technical report which was due by 19 April 2004 nor the semi-annual summary report which was due by 19 September 2004.

    Mawson licence

56. On 12 February 2003, the Minister granted EL3060 to Mawson.  The Mawson licence was granted for an initial term of 1 year, subject to the same relevant conditions and with rights of renewal on the same terms as the Mintech licence.

1. On 5 January 2004, Mawson requested a renewal. It did not pay the prescribed renewal fee ($69).  The renewal was never processed by the Department or granted by the Minister.

2. On 12 February 2004, the annual fee of $2,697.50 for 2004/2005 became due and payable for the licence.  Mawson did not pay it.  On 7 April and 21 June 2004, the Department wrote to Mawson requesting payment of the annual fee and renewal fee.  On 30 July and 15 September 2004, the Department wrote to Mawson with a reminder that the annual and renewal fees had not been paid and warning that, if payment was not made within 7 days, the licence may be cancelled.

3. Mawson did not submit the annual technical report which was due by 12 April 2004 nor the semi-annual summary report which was due by 12 September 2004.

   Goldus licence

4. On 17 July 2001, the Minister granted EL2822, EL2823 and EL2824 to Goldus.  The licences were granted for an initial term of 1 year, subject to the same relevant conditions and with rights of renewal on the same terms as the Mintech licence.  The licences were renewed for a second year expiring on 17 July 2003.

5. On 16 June 2003, Goldus requested further renewals.  It did not pay the prescribed renewal fees.  The renewals were never processed by the Department or granted by the Minister.

6. On 17 July 2003, annual fees for 2003/2004 totalling $11,707.15 became due and payable for the 3 licences.  Goldus did not pay the fees.  On 20 April and 21 June 2004, the Department wrote to Goldus requesting payment of the annual and renewal fees.  On 30 July and 15 September 2004, the Department wrote to Goldus with a reminder that the annual and renewal fees had not been paid and warning Goldus that, if payment was not made within 7 days, the licences may be cancelled.

7. Goldus did not submit the semi-annual summary reports which were due by 17 February or 17 August 2004 nor the annual technical reports which were due by 17 September 2004.

   Cancellation of Goldus group licences

8. In the period leading up to December 2004, Mr Watkins informed the Registrar that he wished to peg 2 mineral claims within the area encompassed by EL2824 held by Goldus, but that Goldus had denied him permission to do so. 

9. On 9 December 2004, Mr Russell-Taylor wrote to the Minister, referring to the exploration licences held by the Goldus group. He suggested that the licensees had not complied with the minimum requirements, including failure to submit semi-annual summary reports and annual technical reports.  He attached 2 applications for exploration licences over 2 adjoining areas which between them encompassed land the subject of the Mintech and Mawson licences and Goldus licence EL2822, as well as other land.

10. On 21 December 2004, the Mining Registrar, Ms Thomas, sent a minute to the Acting Executive Director, Ms Freeman.  The minute recommended that:

    1.licences 2799, 2822-2824 and 3060 held by the Goldus group be cancelled pursuant to s 33 for failure to comply with licence conditions;

    2.letters in terms drafted by Ms Thomas and dated 21 December 2004 be sent to each of the 3 Goldus group licensees informing them of the cancellation and of their right to appeal;

    3.letters in terms drafted by Ms Thomas and dated 22 December 2004 be sent to each of Mr Russell‑Taylor and Mr Watkins informing them of the cancellation, the right of appeal, that there had been interest in the areas of the cancelled licences from other parties and that under the circumstances it was considered equitable that all interested parties be given the opportunity to lodge applications over the areas up to 18 January 2005 and that, if the licensees did not appeal, the grant of applications would be decided by ballot.

11. Ms Thomas had previously discussed with Dr Heithersay her view that the licences ought to be cancelled.  He had concurred with that view.

12. On 23 December 2004, Ms Freeman (acting in Dr Heithersay’s position and as delegate of the Minister) accepted Ms Thomas’ recommendations and signed the minute and the letters to the Goldus group and to Messrs Russell-Taylor and Watkins.

13. While those letters were dated 21 and 22 December respectively, I find that they were not signed until at least 23 December 2004 and were sent by registered post to the addressees on or after that date.

14. On 29 December 2004, each of the Goldus group, Mr Russell‑Taylor and Mr Watkins received their respective letters from Ms Freeman.

15. While the letters to Mr Russell-Taylor and Mr Watkins said that interest had been expressed by other parties in the areas of the cancelled licences, the true position was that the only persons who had expressed interest were Mr Russell‑Taylor and Mr Watkins and their interest was in different areas (Mr Russell-Taylor was interested in the area the subject of Goldus licence 2822 (as well as the Mintech and Mawson licences) whereas Mr Watkins was interested in the area the subject of Goldus licence 2824).

    Lodgement of applications

16. On 29 December 2004, Mr Russell-Taylor lodged over the counter with the Mining Registrar 2 applications for exploration licences.  I find that Mr Russell‑Taylor lodged the applications prior to receiving the letter dated 22 December 2004 and as a result of an internet search.  I make this finding because Mr Russell‑Taylor’s evidence to this effect was not challenged. 

17. The applications were in identical terms to those which Mr Russell‑Taylor had sent to the Minister on 9 December. Mr Russell-Taylor paid the application fees totalling $422. The applications and the fees were accepted by the Mining Registrar.  The applications were designated ELA 2004/924 (“ELA 924”) and ELA 2004/925 (“ELA 925”).

18. On 30 December 2004, the Registrar wrote to Mr Russell‑Taylor acknowledging receipt of his 2 applications and saying that he would be contacted in due course as to their status and that any further information required to support the applications would be requested at that stage.  Mr Watkins did not apply for any exploration licences.  He did peg one or two mineral claims and applied for their registration.  This was in the area encompassed by EL2824 held by Goldus.  Ultimately, in 2006, his application was granted (after Goldus consented) and his mineral claim was registered as number 4012.

19. On 31 December 2004, PepinNini Minerals Pty Ltd (“PepinNini”) lodged electronically an application for an exploration licence designated ELA 2004/928 (“ELA 928”) over an area which partially overlapped Mr Russell‑Taylor’s ELA 924 and partially overlapped the former Mintech licence and the former Goldus licence EL2822.

20. On 4 January 2005, Gladstone Resources Ltd (“Gladstone”) lodged electronically an application for an exploration licence designated ELA 2005/002 (“ELA 002”) which partially overlapped Mr Russell‑Taylor’s ELA 925 and partially overlapped the former Mawson licence.

    Warden’s Court proceedings

21. On 5 January 2005, Mr Russell-Taylor issued a plaint note out of the Warden’s Court against Dr Heithersay, Ms Freeman and others, objecting to what he characterised as the extraordinarily lenient treatment extended to the Goldus group and seeking an order that they be removed from office.

22. On 15 March 2005, an application by the respondents that the Warden’s Court had no jurisdiction to deal with the matter came before the Senior Warden.  Mr Russell‑Taylor had also lodged a submission that the Court did not have jurisdiction (on different grounds to those advanced by the respondents). The Senior Warden adjourned the matter sine die with liberty to apply given that both parties were submitting that he had no jurisdiction.

    ERD Court appeal

23. On 18 January 2005, the Goldus group filed notices of appeal against the cancellations in the ERD Court. The ground of appeal in each case was simply that “there were no proper grounds to cancel the licences.”

24. On 4 February 2005, the Acting Mining Registrar wrote to each of Mr Russell‑Taylor, PepinNini and Gladstone.  She informed each applicant that processing of his or its respective application(s) was on hold pending the outcome of the appeal(s) to the ERD Court by the relevant licence holder(s).  She went on to state that the Department “will hold a ballot to determine any competing applications that had been lodged with the Mining Registrar upon resolution of the appeal(s).” 

25. On 20 October 2005, the Crown Solicitor’s Office wrote to the Mining Registrar.  The letter proceeded on the basis that there was no dispute that the Goldus group were in breach of their licence conditions by failing to pay annual fees and failing to lodge summary and technical reports.  The letter went on to advise that there was a serious prospect that the ERD Court might nevertheless find that there were not proper grounds to cancel the Mawson and Mintech licences because:

    1.the annual fees were relatively small, being for 1 year and outstanding for 8½ months since first requested (referring to a principle of proportionality);

    2.the technical and summary reports had not been the subject of a demand when they became overdue, and had been overdue for 8½ months  and 3½ respectively.

26. The letter recommended that the appeals be settled on the basis that the cancellation of those 2 licences be declared void and each party bear its own costs.  In relation to the 3 Goldus licences, the letter advised that the licences had already expired on 17 July 2004 and hence the cancellation had no further effect upon them. 

27. In early November 2005, a decision was made by or on behalf of the Minister to consent to an order that the cancellation of the 5 Goldus group licences was void.  On 15  November 2005, Minutes of Order to that effect were signed by the parties and sent by the appellants’ solicitors to the Registrar of the ERD Court.  On 18 November 2005, a Judge of the ERD Court made an order in terms of the Minutes of Order without the attendance of the parties.

    Aftermath of resolution of appeals

28. On 13 December 2005, the Mining Registrar wrote to Mr Lewis as director of the Goldus group.  She said that Goldus had applied for renewal of its licences and the Department would now proceed to make a decision as to renewal.  She said that the Mintech and Mawson licences had expired in February 2005 as no application for their renewal had been received prior to that date, a number of applications for exploration licences and mineral claims had been made over the land formerly held under those licences and that the Department would shortly proceed to make decisions on the various applications.  She said:

    Where applications involve the same piece of land, an assessment of the relative merits of the applications will be undertaken.

29. On 22 December 2005, the Mining Registrar wrote to Mr Russell‑Taylor.  She informed him that the Goldus group appeals had recently been settled with the Court ordering that the cancellations were void and that the Department would shortly proceed to make decisions on the various applications.

30. In January 2006, Mr Lewis wrote to the Mining Registrar, the Minister and the Executive Director referring to the Registrar’s letter of 13 December 2005 and claiming that the Goldus group were entitled to reinstatement of all of the exploration licences without competition against other applicants.

31. In February 2006, the Executive Director sent a minute to the Minister recommending that Mawson and Mintech be permitted to lodge applications for exploration licences over the areas previously covered by their exploration licences and that they be given priority over competing applicants due to the cancellations having been deemed to be void.  He recommended that the Minister grant renewals of the 3 Goldus licences if Goldus provided the requisite information and if it were found that Goldus had complied with the conditions, Act, and Regulations during the term for which the licences were last renewed.

32. On 16 February 2006, the Minister wrote to Mr Lewis as director of Mintech and Mawson inviting him to meet with Dr Heithersay, Ms Thomas and Mr Kwitko to discuss the option of lodging new exploration licence applications over the expired licence areas and with a view to the Department explaining the assessment process and the criteria that would need to be addressed.

33. On 18 July 2006, Mr Lewis met with Dr Heithersay.  On 17 August 2006, Dr Heithersay wrote to Mr Lewis to confirm the meeting.  He recommended that the Goldus group apply for new exploration licences over the areas of the expired licences and said that, upon receipt of the applications and the supplementary information identified in appendices to the letter, the assessment of the applications “will be given priority”.  The concept of renewal of the 3 Goldus licences appears to have been abandoned by this point.

34. On 22 December 2006, Dr Heithersay again wrote again to Mr Lewis.  He noted that no applications had been lodged and stated that he required that all necessary applications and documentation be lodged on or before 28 February 2007 after which the Department would proceed to determine all undecided applications.

35. On 27 February 2007, Mawson lodged Exploration Licence Application 2007/99 (“ELA 99”) in respect of part only of the area formerly covered by EL3060 held by Mawson.

36. On 27 February 2007, Goldus lodged Exploration Licence Application 2007/101 (“ELA 101”) in respect of part only of the area formerly covered by EL2799 held by Mintech.  On 12 March 2007, the name of the applicant was changed from Goldus to Mintech.

37. On 2 March 2007, Goldus lodged Exploration Licence Application 2007/116 (“ELA 116”) in respect of part only of the area formerly covered by EL2822.

    Warden’s Court proceedings

38. In April 2006, the respondents in the Warden’s Court proceedings had exercised their liberty to apply.  In June 2006, the Warden’s Court plaint had been listed for trial in December 2006.  In November 2006, the trial dates had been vacated.

39. On 13 February 2007, Mr Russell-Taylor filed a new plaint note in the Warden’s Court against the Minister, Dr Heithersay, Ms Freeman, Ms Thomas and another seeking orders that they approve his exploration licence applications. 

    Further dealings between the Department and Goldus group

40. In March 2007, Dr Heithersay sent a minute to the Minister stating that all applications (including those of the Goldus group) would be assessed on their own merits along with all other competing applications, but weighting may be given to the fact that the Goldus group were disadvantaged by the Department’s cancellation procedures.

41. On 17 May 2007, the Mining Registrar wrote to Mr Lewis, seeking further information from each company of the Goldus group.  The letter gave to Mr Lewis details of the competing overlapping applications in respect of each of Mawson’s, Mintech’s and Goldus’ applications.

    Judicial Review proceedings

42. On 28 June 2007, Mr Russell-Taylor instituted this action for judicial review against the State, Mr Holloway, Dr Heithersay, and Ms Freeman seeking, amongst other things, an order that exploration licences be granted to him in terms of his applications.  His proceedings in the Wardens Court had been dismissed by consent on 19 April 2007 in anticipation of this action.

    Assessment by Technical Panel

43. On 20 July 2007, the Acting Mining Registrar wrote identical letters to all 6 applicants.  Each letter:

    1.said that each applicant’s application was competing with listed applications by other applicants;

    2.said that the competing applications would now require assessment by a Technical Panel of Department officers;

    3.requested that a detailed exploration program, technical expertise, financial capability details and geological and mineralisation models be provided by 3 August 2007.

44. This was the first time that Mr Russell‑Taylor, PepinNini and Gladstone were informed of this proposed method of decision.  However, it appears that the Department in fact was proposing by December 2005 not to proceed with a ballot and was proposing by some time between December 2005 (with variations on the theme up to March 2007) to proceed with a merits based assessment.

45. On 30 July 2007, Mr Russell-Taylor’s solicitor sent a letter to the Acting Mining Registrar.  He said that there should not be any competing applications because Mr Russell-Taylor’s applications were lodged first in time.  He also sought an extension of time in which to provide the information sought.  On 2 August 2007, the Acting Mining Registrar wrote to him granting an extension of 7 days.

46. On 9 August 2007, Gladstone withdrew its applications.

47. On 10 August 2007, Mr Russell-Taylor sent a letter by facsimile to the Acting Mining Registrar dated 9 August providing the information.  The letter concluded by stating that “a separate confidential letter will be submitted giving full details of funds available”.  On the same date, Mr Russell-Taylor’s solicitor sent a letter to the Acting Mining Registrar stating that Mr Russell-Taylor was providing the information without prejudice to his judicial review proceedings and under protest.  He stated that information as to financial capability was commercial-in-confidence and enquired what processes could be arranged to protect the information from public disclosure.

48. On 15 August 2007, the Exploration Co-ordinator wrote to each of the 5 remaining applicants in identical terms.  Each letter stated that:

    1.various exploration licence applications had been lodged which partially overlapped the applicant’s;

    2.where exploration licence applications were not received on the same day, the Department’s usual policy was to treat competing applications on a first come first served basis;

    3.the Department intended to depart from the usual policy in this instance on the basis that the applications overlapped areas that were previously covered by exploration licences wrongfully cancelled by the Department, as a result of which the holders were denied an opportunity to fully exploit their licences;

    4.the Department now intended to proceed by deciding the applications on merit, and in so doing the former holders of the wrongly cancelled licences would be afforded some additional weight in the process;

    5.if the applicant had any objections in relation to the proposed departure from the usual procedure, they should be provided in writing by 24 August 2007.

49. On 23 August 2007, Mr Russell-Taylor’s solicitor wrote to the Exploration Co-ordinator.  The letter:

    1.objected to the process outlined in the letters of 20 July and 15 August 2007;

    2.asserted that there was no good or valid reason to depart from the first come first served practice stated in the Information Sheet;

    3.disputed that the Goldus group’s licences had been wrongly cancelled;

    4.said Mr Russell-Taylor did not know why the Department had agreed that the licences had been wrongly cancelled, but this was in conflict with facts of which he had become aware;

    5.asserted that the Goldus group had again breached their licence conditions and the licences had again been cancelled;

    6.observed that the application by Mawson had been lodged well over 2 years after Mr Russell-Taylor’s application, and contended that this was a serious departure from longstanding practice and published guidelines;

    7.noted that there had been no reply to his letter of 10 August, stated that Mr Russell-Taylor had arranged substantial financial resources and enquired what processes could be arranged to preserve the third party’s confidentiality.

    Assessment of competing applications

50. On 31 August 2007, a meeting was convened of an ad hoc Exploration Licence Assessment Panel (“the Panel”).  The Panel was chaired by Dr Tyne and its other members were officers employed by the Department.  Ms Watson was the secretary. 

51. Dr Tyne explained to the Panel that it was to provide expert assessment and advice to the director,[27] making recommendations in accordance with assessment criteria between competing applications. Dr Tyne listed 6 assessment criteria (taken directly from s 30) to be considered by the Panel. A maximum score was allocated to each of the 6 criteria (ranging from 2 to 5), with a total maximum score of 25. Five plans had been prepared, designated Area 1 to Area 5 inclusive. Each plan showed the area the subject of each set of competing applications within the specified Area number. For example, Area 1 comprised the overlapping area the subject of ELA 925 by Mr Russell-Taylor and ELA 99 by Mawson.

    [27]   The minutes refer to the “Director of Mines”.  I address below the issue as to which “director” this designated.

1. In respect of each area, the Panel gave a score to each applicant in respect of each of the 6 criteria. The net result of the assessment was that Mawson was ranked higher in respect of Area 1, PepinNini was ranked higher/highest in respect of Areas 2 and 3, and Mintech was ranked higher/highest in respect of Areas 4 and 5. Mr Russell-Taylor and Goldus did not succeed in respect of any competing area but their applications also encompassed non-competing areas.

2. On 3 October 2007, Dr Tyne sent letters in a standard form to each of the applicants.  The letter to Mawson:

   1.identified Area 1 on a map attached to the letter and identified the competing applicants in respect of that area;

   2.stated that an Exploration Licence Assessment Panel had met on 31 August 2007 and identified the assessment criteria considered by the Panel;

   3.stated that the Panel had recommended Mawson as “the preferred applicant” for Area 1 and that the director[28] had accepted the recommendation;

   4.set out the conditions determined by the director for the licence;

   5.requested confirmation in writing within 7 days if Mawson wished to accept Area 1, “upon which the ELA will be dealt with in accordance with the standard Departmental circulation and assessment processes”.

   [28]   I address below the issue as to which “director” this designated.

3. The letter to Mintech was essentially the same except that it related to Areas 4 and 5 rather than Area 1. The letter to PepinNini was essentially the same except that it related to Areas 2 and 3, informed PepinNini that it had been unsuccessful in respect of Area 4 and indicated that PepinNini was the preferred applicant for uncontested areas the subject of its application as well as Areas 2 and 3.

4. The 2 letters to Mr Russell-Taylor informed him that he had been unsuccessful in respect of Areas 1 and 2 to 5 respectively but stated that the Panel had recommended, and the director had accepted the recommendation, that uncontested areas the subject of his application be offered to him on the standard set of conditions and also, in the case of the residue of Area 1, on 3 specified conditions. The letter to Goldus was similar.

   Further communications

5. In the meantime, on 17 September 2007, Mr Russell-Taylor had met with Dr Heithersay.  Mr Russell-Taylor was accompanied by representatives of his investors and financiers, Mr Fritz and Mr Leo.  Mr Russell‑Taylor handed to Dr Heithersay a letter dated 13 September 2007 from Capital Direct Australia (“CDA”) signed by Mr Fritz stating that CDA had approved a facility of $10 million for funding exploration the subject of ELA 924 and 925.  Dr Heithersay informed Mr Russell-Taylor that the letter should be lodged with the Mining Registrar and returned it to him.

6. On 18 September 2007, Mr Russell-Taylor’s solicitor had written to the Exploration Co-ordinator, referring to his letter of 23 August, noting he had not received a reply and stating that assessment without giving Mr Russell-Taylor the opportunity to provide financial information would amount to procedural unfairness. 

7. On 19 September 2007, Mr Russell-Taylor had written to the Acting Mining Registrar, enclosing the approval letter from CDA dated 13 September and providing further information in relation to the exploration program, expenditure and funding.

8. On 11 October 2007, Mr Russell-Taylor wrote to Dr Tyne stating that it appeared from Dr Tyne’s letter dated 3 October 2007 that the Panel had already met prior to his meeting with Dr Heithersay on 17 September and demanding the immediate awarding of exploration licences to him in accordance with ELA 924 and 925.

9. On 6 November 2007, the Crown Solicitor’s Office wrote to Mr Russell‑Taylor’s solicitor.  The letter stated that Mr Russell-Taylor had been notified of the results of the assessment of competing applications, but a decision would not be made on the grant of an exploration licence to Mr Russell-Taylor until the Department had completed its usual consultation and advertising procedures.

10. On 7 November 2007, the Crown Solicitor’s Office sent an email to the Mining Registrar, recommending that she now commence processing the ELAs lodged by Mr Russell-Taylor in accordance with the usual procedures and, to address the allegation of lack of procedural fairness, the Panel be reconvened and asked to consider what effect there would have been on their recommendation if they had had before them Mr Russell-Taylor’s letter dated 19 September.

11. On 8 November 2007, the Crown Solicitor’s Office wrote to Mr Russell‑Taylor’s solicitor stating that, as a gesture of goodwill, the Department had agreed to reconvene the Panel and request that it now consider the further evidence provided by Mr Russell-Taylor as to his financial capability to carry out his proposed exploration process.

    Further consideration

12. On 5 December 2007, the Panel reconvened.  The Panel reviewed the content of Mr Russell-Taylor’s letter dated 19 September to establish if the original assessment for Mr Russell-Taylor was incorrectly ranked.  The Panel stated that financial capability and proposed expenditure were only 2 of the 6 criteria considered and noted that the financial capability of Mr Russell-Taylor was not a deciding factor and that proposed expenditure was not always a deciding factor.  The Panel stated that the latest information provided by Mr Russell-Taylor had no material effect on the original ranking. 

13. On 23 January 2008, the Mining Registrar sent minutes addressed to the Manager Land Access recommending consent to the grant of exploration licences on defined licence conditions to each of Mr Russell-Taylor, PepinNini, Mintech and Mawson in accordance with the original recommendation of the Panel of 31 August 2007.  On 24 January 2008, Dr Tyne approved the proposal in accordance with delegated Ministerial powers and functions. 

14. On 24 January 2008, the Mining Registrar sent letters in standard form to each of the applicants informing them that the Manager Land Access (sic), in accordance with delegated Ministerial powers and functions, had considered the application and was willing to grant an exploration licence on defined terms.

    Subsequent events

15. On 13 February 2008, an order was made in this action by consent that the Minister not grant applications for exploration licences to PepinNini, Mintech or Mawson until further order.

16. On 16 June 2011, that order was discharged insofar as it related to Mintech and Mawson.

17. On 13 September 2011, exploration licences numbered 4772 – 4774 were granted by the Minister to Mawson, Mintech and Goldus respectively in relation to the areas the subject of the letters to them dated 3 October 2007.

    Findings of Fact Arguably in Dispute

18. There were several factual matters which appeared at one stage to be in contention as between the parties.  Ultimately by the stage of closing addresses, it appeared that there was in fact no material difference between the parties as to at least some of these factual matters.

19. I address each of the factual matters below.

    Meaning of priority

20. The Information Sheet contained the following passage:

    Applications are treated on a first come first served basis.  If two or more applications arrive for the same area on the same day, priority will be based on the relative merits of the applications.  An applicant will be informed as to whether the application has priority for processing and may be required to provide further information.

    Following assessment, an offer will be made to the applicant, setting out the terms and conditions under which a licence may be granted.

21. Assuming that 2 applications were received on different days, the defendants did not contend that “priority” merely meant that priority would be given to the application first in time if all other things were equal.  In any event, I find that the practice as to “priority” did not have such a limited meaning.  This is demonstrated by the reference to the exception to the rule in the Information Sheet itself, which refers to a merits assessment only in the event that 2 applications are received on the same day.  It is also inconsistent with the tenor of the Information Sheet as a whole, and with the first affidavit of Ms Thomas paragraphs 7 to 15.

22. On the other hand, the plaintiff did not dispute that the practice did not circumscribe or affect the Minister’s discretion under the Act whether or not to grant an exploration licence at all to the applicant who is first in time, ie taking into account considerations other than subsequent (otherwise competing) applications. In any event, I so find that the practice did not entail the automatic grant of a licence to the applicant first in time, but rather was confined to an assessment of the application first in time on its own merits (as opposed to relative to subsequent applications). I make this finding particularly on the basis of Ms Thomas’ first affidavit at paragraphs 7 to 11.

23. Ultimately, by the time of closing addresses, my understanding is that it was common ground between the parties that the first come first served practice involved “priority” being afforded to the application first in time (provided another application was not received on the same day) in the sense which I have found.  This entailed that the application would be assessed in effect as if it were the only application received and a decision made either to accept it or reject it.  If it were rejected, consideration would then move on to subsequent applications.  In any event, if this was not common ground, I so find for the reasons set out above.

    Departures from the first come first served practice

24. The defendants contended that the evidence disclosed that historically the first come first served practice had not been applied in respect of every application.  In closing addresses, I did not understand the plaintiff to contend to the contrary.  The real question is as to the circumstances in which that practice had not been applied as to which there also did not appear to be a significant contest between the parties.  In any event, I make the following findings.

25. First, it is clear from the Information Sheet that, where 2 applications were lodged on the same day, a first come first served practice did not apply to discriminate between different times on the same day and priority was determined instead by a merits assessment.  Ms Thomas gave evidence that, where a merits assessment failed to distinguish clearly between 2 or more applicants, a ballot had been undertaken.  Ms Thomas was vague in her recollection as to whether or when or how many times this had occurred.  This did not involve any departure from the practice, because the practice was itself expressed to apply only where 2 applications were received on different days.

26. Secondly, Ms Thomas referred in her evidence to a special circumstance in which land which had been reserved pursuant to s 15 of the Act was released from reservation.[29] S 15 effectively empowers the Minister or the Director of Mines to decide to undertake an investigation or survey of defined land, in which case he or she is required to publish 14 days’ notice in the Gazette identifying the land and proposed completion date for the investigation or survey, and s 15(7) empowers the Minister to refuse to receive and consider any application for a mining tenement in the meantime. Ms Thomas gave evidence that, when the investigation or survey had been completed and the prescribed “completion date” had been reached, on a least one occasion which she recalled, competing applications had been decided by ballot. Ms Thomas could not recall whether the applications had been made on the same day or different days. Ms Thomas could not recall if this had occurred on other occasions involving s 15 gazettal releases. Ms Thomas considered a s 15 gazettal release as a special circumstance in which departure from the first come first served practice was considered appropriate.

    [29] Or where land was released from being exempt under s 9A of the Act.

27. In general, Ms Thomas was very vague in her recollection about occasions on which there had been a departure from the first come first served practice. Ms Thomas was unable to recall any other special circumstances (beyond s 15 gazettal releases) in which either a ballot or merits assessment had been used to determine competing applications lodged on different days.

28. My finding is that, historically, there had been a departure from the first come first served practice in circumstances involving the release of land the subject of a s 15 gazettal, but not in other circumstances. However, nothing ultimately turns on the nature or extent of such circumstances for reasons which will appear.

    Qualification for first in time priority

29. The defendants contend that, if there was an absolute obligation upon the Minister to grant the first in time application, Mr Russell-Taylor’s application did not qualify as the first in time application for the purposes of that obligation.  Specifically, the defendants contend that an application only qualifies as first in time if it complies with each of the 5 requirements stated on page 1 of the Information Sheet and that Mr Russell-Taylor’s application did not address evidence of his financial and technical capability. 

30. For reasons which will appear, I hold that it was not an absolute obligation upon the Minister to grant the first in time application and hence nothing turns on this factual issue.  Nevertheless, for the sake of completeness, I make findings in relation to it. 

31. While the Information Sheet refers to “evidence” (and gives an example of acceptable financial evidence) and s 29(2)(d) refers to “a statement”, I construe the Information Sheet as intending to refer to whatever is required by s 29(2)(d). I so construe the Information Sheet for reasons which include the following.

    1.The heading for that section of the Information Sheet on page 1 is “Application (section 29)” and it purports to set out what s 29 requires as opposed to an additional requirement for the purposes only of the first come first served practice (which is not addressed until page 2).

    2.In broad terms, the 5 matters listed on page 1 correspond with the 5 sub-paragraphs of s 29(2) in conjunction with s 29(1) of the Act. Specifically:

    (a) item 1 corresponds with s 29(2)(b) in conjunction with s 29(1) and s 30A(1);

    (b) item 2 corresponds with s 29(2)(e);

    (c) item 3 corresponds with s 29(2)(c);

    (d) item 4 corresponds with s 29(2)(d); and

    (e) item 5 corresponds with s 29(2)(a).

    3.Nothing in the Information Sheet at page 2 under the heading “Processing” suggests that the criteria for an application being treated as first come first served are different from those for its being treated as a valid application pursuant to s 29.

    4.The proforma application, which is required by s 29(1) to be in a manner and form determined by the Minister, refers to the Information Sheet and also contains the note “Priority is allocated according to the day a valid application is received.” This indicates that the criteria for priority are intended to be identical to the criteria for a valid application.

    5.The proforma application contains, amongst other things, 6 boxes which correspond with the 5 requirements specified in s 29(2) (with 2 separate boxes addressing technical and financial resources). One box is entitled “Evidence of Technical Resources” and the other is entitled “Evidence of Financial Resources”. The application forms as completed by Mr Russell-Taylor on 29 December 2004 were accepted by the Registrar on 29 December 2004. There was no suggestion at the time of acceptance of the forms and receipt of the application fees that the applications were invalid. Subsequent correspondence to Mr Russell-Taylor and in particular the letter dated 30 December 2004 treated the applications as valid. Similarly, the applications lodged electronically by PepinNini and Gladstone in late December 2004/early January 2005 were accepted as “successful” and were treated by the Department as valid applications notwithstanding that they neither contained nor attached any evidence of technical or financial capability.

    6.No evidence was given by any of the Department witnesses that Mr Russell-Taylor’s applications did not qualify for the purposes of the first come first served practice (insofar as that practice was applicable), nor that they regarded them as not so qualifying at the time.  On the contrary, the tenor of the evidence, particularly from Ms Thomas, was that the Department did not take an overly critical or technical attitude towards applications.

32. Accordingly, I find that Mr Russell-Taylor’s applications qualified for the purposes of the first come first served practice (to the extent that the practice was applicable).

    Identity of the “director”

33. The minutes of the Panel meeting of 31 August 2007 refer to the “Director of Mines” making certain statements to the meeting and also to the outcome that “the Panel will advise the Director of Mines of all decisions as soon as possible” and “successful applicants are to be advised in writing by the Director of Mines”. The minutes of the meeting were prepared by Ms Watson and signed by Dr Tyne as Chair.

34. The minutes are ambiguous as to whether the person referred to as the Director of Mines is Dr Tyne throughout, Dr Heithersay throughout or Dr Tyne as the Director of Mines speaking at the meeting and Dr Heithersay as the Director of Mines who will take future action. The ambiguity arises from the combination of the fact that Dr Heithersay was unequivocally the Director of Mines (and Dr Tyne was not) but Dr Heithersay was unequivocally not at the meeting (and Dr Tyne was). My finding is that the person referred to as the Director of Mines throughout the minutes was in fact intended to be Dr Tyne and not Dr Heithersay. While I did not find Dr Tyne’s explanation for his being described as Director of Mines that he held a delegation from Dr Heithersay convincing (given that only the Minister can exercise powers under s 28 and given that he signed the minutes as Director, Mineral Resources), it is clear that Dr Heithersay was not at the meeting and on his own evidence did not accept the recommendations of the Panel (whereas Dr Tyne did).

35. A similar issue arises as to the use of the term “Director of Mines” in the letters dated 3 October 2007.  For similar reasons, I find that those letters refer to Dr Tyne and not to Dr Heithersay. 

36. The letters dated 24 January 2008 refer to the decision of willingness to grant exploration licences being made by the “Manager, Land Access”.  I find that in fact the decision was made by Dr Tyne and not Ms Freeman.  It appears that the letters dated 24 January 2008 were drafted by Ms Thomas at a time when she expected that her proposal (which she had addressed to the Manager, Land Access) would be accepted by Ms Freeman, but this did not transpire. 

    Meaning and timing of proposed courses of action

37. There were on the evidence potential uncertainties about the meaning and timing of various proposals by Department officers from time to time about processing applications for exploration licences. 

38. I find that the method being proposed by Department officers in December 2004 was that, if there were no successful appeal by the Goldus group against the cancellations of the licences, applications and only applications lodged up to 18 January 2005 would be considered and if there were competing applications they would be decided by ballot; but, if there were successful appeals by the Goldus group, it was assumed without further consideration that this would supersede any need to consider any such applications.  I find that this proposal continued until November 2005.

39. I find that in November 2005 it was assumed by Department officers that, upon the ERD Court making an order that the cancellation of the Goldus group licences was void, there would be no need to further consider the applications which had been lodged in December 2004 and January 2005.

1. I find that by December 2005 it was believed by Department officers that the Mintech and Mawson licences had in any event expired due to non-renewal, and it was proposed to assess all competing applications on their relative merits (as opposed to a ballot or any other process). 

2. I find that from February 2006 it was proposed by Department officers that Mawson and Mintech be given the opportunity to lodge new applications over the areas previously covered by their licences and that they be given priority in the same sense as under the first come first served practice, namely that they would be assessed on their own merits without competition against other applications.

3. I find that from March 2007 it was proposed by Department officers that there be an assessment of the relative merits of all competing applications (including the recently lodged Goldus group applications), but that weighting would or may be given in favour of the Goldus group.

4. I find that Dr Tyne was unaware of the intention to give or possibly give a weighting in favour of the Goldus group and that the assessments made in August and December 2007 by the Panel did not afford any weighting in favour of the Goldus group.

   Overview of Plaintiff’s Case

5. The plaintiff’s case is that the decision(s) to offer exploration licences to Mawson, Mintech and PepinNini instead of to Mr Russell-Taylor (and certain decisions leading up to that final decision(s)) is (are) void. 

6. While the remedies sought are expressed to be declarations that the decisions were void, in substance the relief sought is in the nature of certiorari and all parties conducted the case on the basis that Mr Russell-Taylor seeks inter alia a quashing of the decision(s) in the nature of certiorari.

7. Essentially, Mr Russell-Taylor contends that the decision(s) is (are) void on the following alternative grounds.

   1.The Minister had no power under the Act to grant licences other than in accordance with a first come first served basis.

   2.Mr Russell-Taylor had a legitimate expectation that the Crown would process and grant licences on a first come first served basis but the Crown proceeded to grant the licences to Mawson, Mintech and PepinNini in violation of its obligations to Mr Russell‑Taylor arising from the expectation.

   3.The Crown was obliged to give Mr Russell-Taylor the opportunity to submit material in support of his application and to give consideration to that material before and in making a decision but it proceeded to grant the licences to Mawson, Mintech and PepinNini in violation of its obligations to Mr Russell‑Taylor.

8. Aside from relief by way of certiorari or declaration, Mr Russell-Taylor also seeks an order that the Crown grant licences to him in terms of his applications.

9. The defendants deny that the Minister lacked power to make a decision as to the grant of licences other than on a first come first served basis or that Mr Russell-Taylor’s legitimate expectation gave rise to any substantive right that the State would act in accordance with the first come first served practice.  The defendants concede that in the circumstances of the case the Crown was obliged to give to Mr Russell-Taylor the opportunity to make submissions why it should not depart from the first come first served practice prior to making any decision on the grant of licences.  They contend that the Crown did afford that opportunity to Mr Russell-Taylor, that he took advantage of that opportunity and that the Crown took into consideration his submissions before and in deciding to grant the licences to Mawson, Mintech and PepinNini on a merits assessment basis.

10. The defendants concede that in the circumstances of the case the Crown was obliged to give to Mr Russell-Taylor the opportunity to submit material in support of his application and to give consideration to that material before and in making a decision to grant the licences to Mawson, Mintech and PepinNini.  They contend that Mr Russell-Taylor was not denied that opportunity by the failure to respond to his requests in relation to confidentiality prior to 31 August and 3 October 2007 and alternatively that his additional material concerning his financial capability was taken into account in December 2007/January 2008.

11. Mr Russell-Taylor does not challenge the decisions in question on the grounds that the Minister took into account an irrelevant consideration, did not take into account a relevant consideration or made a decision which was so unreasonable that no reasonable person could have made it.

    Application for Permission to Amend

12. During closing submissions, Mr Russell-Taylor applied for permission to amend his statement of claim to plead that the defendants had no power to revoke the cancellation of the Goldus group licences by consenting to an order to that effect by the ERD Court and that the ERD Court had no power to make the order.  I reserved my decision on whether or not Mr Russell-Taylor ought to be permitted to amend until I delivered my reasons for judgment in the action.  I turn now to that question.

13. Mr Russell-Taylor’s application to amend was to add the following pleas to the statement of claim:

    43(1) The defendants had no power to revoke the cancellation of the exploration licences which was made pursuant to s 33 of the Act; and

    (2) The agreement took away the judicial function of the ERD Court and thereby sought to have the ERD Court administratively endorse that agreement;

    (3) The ERD Court was required by s 33(2) of the Act to judicially consider the cancellation and failed to do so in its judicial function and thus any administrative endorsement or declaration of the cancellation were void and that the exploration licences were reinstated was unlawful and in itself void and of no effect and declare that the cancellation of the exploration licences void.

    49 In the premises … the agreement entered into between the defendants and the Companies and the failure of the ERD Court to judicially decide the Companies’ appeal to it was contrary to the provisions to s 33(2) of the Act.

14. The defendants opposed permission to amend on 3 grounds:

    (a)the proposed allegations are not reasonably arguable;

    (b)the plaintiff was not sufficiently prompt in seeking to challenge the ERD Court’s orders;

    (c)the proposed allegations are irrelevant.

    Allegations not reasonably arguable?

15. By way of introduction:

    1.S 5 of the Environment, Resources and Development Court Act 1993 (SA) (“the ERD Act”) provides that the ERD Court is a court of record. It does not provide that it is a superior court. It appears that the District Court is an inferior court.[30]  A fortiori, the ERD Court is an inferior court.  It follows that the ERD Court does not have power to determine (conclusively) whether or not it has jurisdiction to make an order in a particular matter.[31]

    [30]   Byrnes v The Queen [1999] HCA 38; (1999) 199 CLR 1 at [32] per Gaudron, McHugh, Gummow and Callinan JJ.

    [31]   Craig v South Australia (1995) 184 CLR 163.

    2.The Act does not empower the Minister to revoke the cancellation of a licence.  Once cancelled, the Minister has no power to reinstate a licence of his own volition.  The Minister can only reinstate a licence if the ERD Court has first declared the cancellation void pursuant to s 33(2).

    3.S 33(2) of the ERD Act provides:

    Where a licence is cancelled or suspended under subsection (1), the licensee may, within 28 days after the cancellation or suspension, appeal to the ERD Court and the Court may, if it is satisfied there is no proper ground for the cancellation or suspension, declare that cancellation or suspension void.

    [Emphasis added].

    S 33(2) expressly provides that the ERD Court only has jurisdiction to declare a cancellation void if it is satisfied that there is no proper ground for the cancellation.

    4.In Thomson Australian Holdings Pty Ltd v Trade Practices Commission,[32] the Trade Practices Commission brought an action in the Federal Court against various liquor retailers seeking, inter alia, injunctions in respect of alleged breaches of s 45 of the Trade Practices Act 1975. The action was settled on the basis that the Federal Court would make a consent order by way of injunction restraining one of the retailers from engaging in defined conduct. The High Court held that the Federal Court had no jurisdiction to make the orders because its power under s 80 of the Trade Practices Act was confined to granting an injunction restraining a person from engaging in conduct in contravention of (relevantly) s 45 of the Act and the orders and undertakings restrained conduct going beyond contraventions of s 45. Gibbs CJ, Stephen, Mason and Wilson JJ said:

    [32] (1981) 148 CLR 150.

    The provisions of [the] Act, correctly understood, do not empower the Court to grant injunctions restraining, or relating to, contraventions of the Trade Practices Act in situations falling outside the boundaries drawn by s 80 of that Act...

    s 80 proceeds upon the footing that it constitutes the Federal Court's exclusive charter to grant injunctions restraining, or relating to, contraventions of the Trade Practices Act…

    The parties by consent cannot confer power upon the Court to make orders which the Court lacks power to make. As we have seen, the relevant jurisdiction of the Court in relation to the granting of an injunction is limited to the hearing and determination of actions in which application is made for the making of orders under s 80 (1) restraining a person from engaging in conduct of a specified kind. The orders made (which were the orders sought) restrain the defendants from engaging in conduct that does not necessarily constitute a contravention of Pt IV… The orders therefore lack the essential feature which distinguishes conduct amounting to a contravention of Pt IV from conduct which does not amount to such a contravention.

    We would dismiss the cross appeal on the ground that the Federal Court lacked jurisdiction or power to make the consent orders.

    5.In Parisienne Basket Shoes Pty Ltd v Whyte,[33] Dixon J (Evatt J and McTiernan J agreeing) said:

    Where there is a disregard of or failure to observe the conditions, whether procedural or otherwise, which attend the exercise of jurisdiction or govern the determination to be made, the judgment or order may be set aside and avoided by proceedings by way of error, certiorari, or appeal. But, if there be want of jurisdiction, then the matter is coram non judice.  It is as if there were no judge and the proceedings are as nothing.  They are void, not voidable…

    It cannot be denied that, if the legislature see fit to do it, any event or fact or circumstance whatever may be made a condition upon the occurrence or existence of which the jurisdiction of a court shall depend.  But, if the legislature does make the jurisdiction of a court contingent upon the actual existence of a state of facts, as distinguished from the court's opinion or determination that the facts do exist, then the validity of the proceedings and orders must always remain an outstanding question until some other court or tribunal, possessing power to determine that question, decides that the requisite state of facts in truth existed and the proceedings of the court were valid. Conceding the abstract possibility of the legislature adopting such a course, nevertheless it produces so inconvenient a result that no enactment dealing with proceedings in any of the ordinary courts of justice should receive such an interpretation unless the intention is clearly expressed.[34]

    [Emphasis added].

    In the present case, all parties proceeded on the basis that it was the ERD Court’s satisfaction of the relevant fact, as opposed to the objective existence of the relevant fact, which conditioned its jurisdiction and power to make an order pursuant to s 33(2) of the Act.

    [33] (1938) 59 CLR 369; [1938] HCA 7.

    [34] (1938) 59 CLR 369 at 389, 391.

16. The defendants contend that the ERD Court was entitled to reach the requisite satisfaction merely by reason of being informed that both parties were consenting to the order.

17. I consider that the High Court’s reasoning in Thomson Australian Holdings applies directly to s 33(2).  The ERD Court only has jurisdiction and power to make an order declaring a cancellation void if it is first satisfied that there is no proper ground for the cancellation.  It cannot simply make an order declaring the cancellation void because the parties consent to such an order.

18. The question then becomes whether the ERD Court did not achieve the required state of satisfaction that no proper ground existed for the cancellation of the relevant licences.  I conclude that it is arguable (and indeed, if I were required to decide, I would so find) that the ERD Court did not achieve the requisite state of satisfaction.  This is for the following reasons.

19. First, the evidence shows that the ERD Court was not told by the parties of any grounds or facts by reason of which the cancellations were said to be void.

    1.The notices of appeal by the Goldus group on 18 January 2005 stated as the ground of appeal merely “that there were no proper grounds to cancel the licences”.[35] 

    2.The ERD Court record shows that no further or more particular grounds of appeal were ever filed.[36]  On its face, the appellants did not disclose to the ERD Court why they contended that there were no proper grounds to cancel the licences.

    3.The order declaring the cancellations void was made on 18 November 2005 without the attendance of any of the parties.[37] 

    4.The Court record shows for 18 November 2005 “matter settled by Minutes of Order being received from Ms Ward of counsel for the Minster and endorsed by both parties.  Her Honour… makes an order in terms of the Minutes of Order.”  This refers in turn to a letter dated 15 November 2005 from Ms Ward on behalf of the Crown Solicitor.[38]  The letter attached Minutes of Order and merely stated “the parties have agreed to settle these proceedings in the terms of the attached Minutes of Order which have been signed by the solicitors for the parties.  I respectfully request that the Court makes orders in the terms agreed by the parties.  Please note that a directions hearing is currently scheduled for this matter at 9.55 on Friday 18 November 2005 and this would now need to be vacated.”

    5.There was no opportunity for the parties to inform the Court of the basis on which it was contended, or might be concluded, that there had been no proper grounds to cancel the licences.

    [35]   Exhibit P5 page 88.

    [36]   Exhibit P5 pages 45-56.

    [37]   Exhibit P2 pages 48, 52 and 56.

    [38]   Exhibit P5 page 35.

20. Secondly, the order itself, in terms of the Minutes of Order,[39] merely recites “upon the parties in this matter reaching a settlement, the Court hereby orders by consent that the cancellation of [the licences] is void.” It does not recite any satisfaction by the Court.

    [39]   Exhibit P5 page 36.

21. Thirdly, if the ERD Court had enquired into the question whether there were or were not proper grounds for the cancellation of the licences, it would have ascertained that the Goldus companies were in manifest breach of their licences by having failed to pay the annual fee for the relevant 2004/2005 year and had been in such breach for many months and despite 4 written reminders, including 2 warning of cancellation.  In these circumstances, the ERD Court could not have been satisfied that there was no proper ground for the cancellation of the licences.  In this regard, I note that the Department had received legal advice that there was a serious prospect that it might be held that cancellation for non‑payment of the annual fees was a disproportionate action and implicitly that the breach of the licence conditions by failing to pay these annual fees was not a proper ground for termination.  I consider that the ERD Court would have been bound to conclude that its jurisdiction under s 33(2) was by way of appeal and not judicial review; that its task was not to assess proportionality[40] but rather whether the Goldus group had substantively breached the Act or the licence conditions; and in any event that no issue of disproportionality arose in circumstances in which payment of the annual fee was an express condition of the licences, payment had been overdue for most of the year to which it related and 4 written reminders (including 2 warnings) had been sent in respect of it.

    [40]   Which may or may not have been an available ground of judicial review if the Goldus group had brought judicial review proceedings.

22. Fourthly, even if it had been open to the ERD Court, after considering the facts and issues, to be satisfied that no proper grounds existed to terminate the licences, there would necessarily have had to have been a very substantial dialogue between the Court and the parties before the Court could have reached such a degree of satisfaction.  All of the evidence demonstrates that no such dialogue took place. 

23. Finally, while a court may take into account the consent of the parties to an order in achieving a state of satisfaction,[41] all of the evidence here points to the fact that the ERD Court gave no consideration at all to reaching a state of satisfaction that there was no proper ground for the cancellation of the licences. 

    [41] And not pursue as thorough an examination of the facts and issues as would be the case in a disputed hearing: Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy [2008] FCAFC 7; (2008) 166 FCR 64 at [47] per French, Weinberg and Greenwood JJ.

    Delay?

24. The defendants contend that, having been informed of the ERD Court orders by letter dated 22 December 2005, the plaintiff delayed in challenging their validity for almost 6 years and should not now be permitted to do so.  The defendants also contend that third parties (PepinNini, Mintech and Mawson) would be potentially prejudiced by an order avoiding those consent orders at this stage. 

25. If the plaintiff were seeking in this action an order avoiding the consent orders, there would be much force in the defendants’ contentions.  However, the plaintiff does not seek any such relief.  He seeks to plead the invalidity of the consent orders merely as a relevant fact going to the validity of the impugned decisions of the Crown.  His application to amend is responsive to what he perceives to be contentions by the defendants relying upon the validity of those orders as an answer to his challenge to the impugned decisions. 

26. If the premise were correct that the validity of the consent orders is a relevant fact going to the challenge of the impugned decisions, I do not consider that delay by the plaintiff in seeking permission to amend would be fatal.  While the application for permission to amend was made very late (during the course of final addresses and after the close of evidence), the defendants were given an opportunity to adduce any further evidence in the event that I should grant permission to amend and chose not to do so (and thereby implicitly conceded that there is no further evidence which they would have wished to adduce).  In these circumstances, delay would not be fatal if the premise identified were correct.  However, for reasons which appear below, that premise is not correct and that ultimately leads to my decision to refuse permission to amend.

    Allegations Irrelevant?

27. The defendants contend that the objective question whether or not the consent orders were valid is irrelevant to the issues before the Court.  The defendants explicitly state that their case does not rely in any way upon the validity of the consent orders. 

28. Prior to closing addresses, it appeared that the defendants may have been relying upon the orders made by the ERD Court as a component part of their defence to the plaintiff’s proceedings.  However, the defendants have now made it clear that they were not so relying.  For this reason, I accept that the objective validity of the ERD Court orders is not a relevant issue in these proceedings.

    Conclusion

1. 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.

2. Having reached this conclusion, my conclusion is reinforced by a consideration of the steps which any decision-maker in Dr Tyne’s position would or may have taken to consider Mr Russell‑Taylor’s submissions.

   1.Mr Russell-Taylor’s first contention was that the Department had not identified any good or valid reason to depart from the first come first served practice. The sole reason[82] which had been identified in the Department’s letter dated 15 August 2007 was that the licence application overlapped areas previously covered by exploration licences which were wrongfully cancelled.  The letter stated that, as a result of that wrongful cancellation, the holders of those now expired licence were denied an opportunity to fully exploit them.

   2.Mr Russell-Taylor’s second contention was that he submitted that the Goldus group licences had been rightly cancelled.  Mr Russell‑Taylor’s first and second contentions raised the questions what were the grounds of cancellation and were the cancellations valid.  Any enquiry by Dr Tyne as to the grounds of cancellation would have disclosed that Mintech, Mawson and Goldus had not paid their annual renewal fees which had been due since February 2004 and August 2003 respectively notwithstanding 2 reminder letters and 2 letters warning of cancellation due to non-payment of renewal.  On its face, this constituted a valid ground for cancellation and would have led to further inquiry.   

   3.Any inquiry by Dr Tyne into the circumstances leading up to cancellation would almost certainly have disclosed that Goldus, Mintech and Mawson had requested renewal of their licences in June 2003, January 2004 and January 2004 respectively but had never paid the application fee (payment of the prescribed application fee being a mandatory component of an application for renewal pursuant to s 30A(4) and (4a)). This would have given rise to the question whether, independently of cancellation, Goldus had any entitlement to a renewal of its licences in respect of the 2003/2004 year and Mintech and Mawson had any entitlement to a renewal of their licences in respect of the 2004/2005 year.

   4.Mr Russell-Taylor’s third contention was that the Goldus group had again failed to meet licence conditions.  Any inquiry into this contention would almost certainly have revealed that the Goldus group were each in breach of the conditions of their licence by having failed to lodge at least one summary report and one annual technical report during the relevant licence year 2004/2005 (as well as having failed to pay annual fees), such that they arguably had no entitlement to a further renewal by reason of the term of the licences making renewal conditional upon the licensee having complied with the conditions of the licence during the term for which the licence was last renewed.

   5.Mr Russell-Taylor’s fourth contention was that Mawson did not lodge its application until 2007, which raised the question of delay by Mawson (and in reality Mintech and Goldus).  Any inquiry by Dr Tyne would inevitably have led to a consideration of the delay by the Goldus group between February 2006 (when the Minister wrote to Mintech and Mawson inviting them to lodge new exploration licence applications) and February 2007 (when such applications were finally lodged).

   [82]   The original reason given in the letters dated 22 December 2004 had been the expression of interest in the areas the subject of the cancelled licences by multiple parties.  If Dr Tyne had inquired into this original reason, he may well have learnt that in fact interest had  been expressed only by Mr Russell‑Taylor and Mr Watkins in quite different areas.

3. It is evident that Dr Tyne did not proceed down any of these paths of inquiry or consideration.  If he had considered and taken into account Mr Russell‑Taylor’s submissions (and made a decision to depart from the usual practice after doing so), it is possible that Dr Tyne would not have made all of these inquiries, but he would have made some inquiries.  He may have reached a decision that, notwithstanding what he learnt and considered, he should depart from the usual practice, but it is evident that he did not so act.

   Evidence of Ms Watson

4. In her affidavit Ms Watson said that she considered the contents of the letter of 23 August 2007 and decided that the objections raised did not warrant the Department proceeding other than as set out in the letter of 15 August 2007.  Ms Watson did not elaborate on this in her oral evidence.  Ms Watson did not say that she discussed the objections with Dr Tyne (or any other superior) or made a recommendation to him or that he made any decision in this respect.  Nor did Dr Tyne give any evidence that he received any recommendation from Ms Watson and made any decision on the basis of it. Ms Watson’s affidavit was filed before the Crown decided to call Dr Tyne as a witness.

5. Ms Watson was relatively low in the hierarchy in the Division. She reported to the Leader of the Mineral Tenements program (Ms Thomas), who in turn reported to the Manager of the Land Access Branch (Ms Freeman), who in turn reported to the Director of Mineral Resources (Dr Tyne), who in turn reported to the Executive Director (Dr Heithersay). The Minister had only granted delegations of his powers down to the level of Dr Heithersay and Dr Tyne. Ms Watson (and her immediate superiors Ms Thomas and Ms Freeman) had no authority to make a decision on behalf of the Minister under the Act.

6. The obligation to comply with the hearing rule (as part of the obligation to afford nature justice) is an obligation borne by the decision-maker: see Heatley and FAI Insurances Limited cited above.  In the present case, the nominal decision-maker was the Minister, and the actual decision-maker was Dr Tyne as the Minister’s delegate. 

7. In those circumstances, Dr Tyne himself was obliged to give consideration to, and take into account, Mr Russell‑Taylor’s submissions and then make a decision on the offering of licences by a merits assessment rather than the first come first served basis.  There was no reason why Dr Tyne could not have sought a report or a recommendation from a subordinate such as Ms Watson, but neither Dr Tyne nor Ms Watson suggested that he did so. 

8. I do not need to consider whether it was possible for Dr Heithersay to give consideration to Mr Russell-Taylor’s submissions and make the decision whether or not the grant of the exploration licences should be decided in accordance with the first come first served practice or in accordance with a merits based assessment in circumstances under which Dr Tyne was to make the substantive decision.  This is because Dr Heithersay did not suggest in his evidence that he considered Mr Russell-Taylor’s submissions or made a decision in relation to them.  Nor did he suggest that he discussed the question with Ms Watson or received a report or recommendation from her in relation thereto.  Indeed, it appears that, as at August 2007, Dr Heithersay was leaving the decision making to Dr Tyne in light of the fact that Dr Heithersay had been joined as a defendant to this action at that point.

9. The decisions of the High Court in Heatley and FAI Insurances Limited cited above indicate that the relevant decision-maker cannot abrogate their responsibilities by a wholesale delegation to another of the function of considering and making a decision on the submissions.  Even if this were possible, there was no suggestion that Dr Tyne delegated to Ms Watson this function. Further, to the extent that decisions had been made prior to August 2007 as to proceeding by way of merits assessments, they had been made at the level of Dr Heithersay and not by or at the level of Ms Watson.

10. In the above circumstances, such consideration as Ms Watson gave to Mr Russell-Taylor’s submissions did not entail compliance with the hearing rule or afford Mr Russell-Taylor natural justice.

    Conclusion

11. I conclude that the Minister and his delegate Dr Tyne did not afford to Mr Russell-Taylor natural justice by the way of considering and taking into account his submissions prior to and in deciding to offer licences by departing from the usual practice.  Where there is a denial of natural justice, it was accepted by the defendants that the decision in question is void.

    Procedural Fairness concerning Financial Capability

12. The defendants accept that, in the circumstances of this case, to afford procedural fairness and comply with the hearing rule, it was necessary to afford to Mr Russell-Taylor an opportunity to put before the Panel, and for the Panel to consider, any relevant material that he wanted the Panel to consider.[83]

    [83]   Written Closing of the First and Second Defendants paragraph 49; Outline of Closing Argument of the Fifth and Sixth Defendants paragraph 53.

    Decision of October 2007

13. The defendants contend that the letter dated 20 July 2007 gave to Mr Russell-Taylor this opportunity, which Mr Russell-Taylor utilised by sending his letter dated 9 August 2007.  Mr Russell-Taylor contends that his letter dated 9 August and his solicitor’s letter dated 10 August 2007 stated that he had available evidence of his financial capability which he wished to place before the Department and in respect of which he enquired as to preservation of its confidentiality.  He further contends that the assessment by the Panel on 31 August 2007 and subsequent decision by Dr Tyne evidenced by the letters dated 3 October 2007 assessing the competing applications without first obtaining from Mr Russell‑Taylor his evidence of his financial capability or responding to his letters denied him procedural fairness.  In response, the primary contention of the defendants is that the Department had no obligation to agree to maintain confidentiality in the material provided by Mr Russell-Taylor and hence there was no denial of procedural fairness. 

14. This issue needs to be considered against the background of the evidence of the Department witnesses that, as a matter of course, the Department customarily maintained confidentiality in material provided to it by applicants for and holders of mineral tenements (except where required to be publicly disclosed), without being requested to do so.  For example, Dr Tyne said “the normal business process in PIRSA in dealing with an application for an exploration licence which identifies proposed commercial expenditure… all applications are held as confidential and all information provided as confidential… so that business processes are to be very diligent about maintaining confidentiality.”[84]

    [84]   T587.

15. In relation to the defendants’ contention that the Department had no obligation to agree to receive information on a confidential basis, I did not understand the plaintiff to contend otherwise.  If he did, I reject his contention.

16. Mr Russell-Taylor’s contention was that, the Department having being told by him that he had available evidence of financial capability and that he was inquiring as to its processes to maintain confidentiality, he was denied procedural fairness by the Department simply proceeding to make a decision without responding to his letters in this respect or affording him the opportunity of providing that information.  I accept that submission.

17. Given that the Department had afforded to Mr Russell-Taylor the opportunity to submit evidence of his financial capability to carry out the proposed exploration and that Mr Russell-Taylor had, within the requisite period, informed the Department that he had available that specific information, procedural fairness required that the Department not make a determination without first responding to his inquiry as to confidentiality so that Mr Russell-Taylor had an opportunity to bring forward that information.  If there had been a response, I find that it would have been to the effect that such information was kept confidential as a matter of course.  However, even if the Department had responded by stating that there were no processes available to protect the information from public disclosure, Mr Russell-Taylor would then have had a choice to make between providing or not providing the information.  Due to the lack of response by the Department, he was not given that opportunity.

18. Accordingly, if I had concluded that the letters dated 3 October 2007 evidenced a decision capable of being subject to an order of certiorari, I would have quashed that decision due to a denial of procedural fairness.  However, I have already concluded that that decision is not subject to quashing.

    Decision of January 2008

19. The defendants argue that, if Mr Russell-Taylor was denied procedural fairness prior to the decision evidenced by the letters dated 3 October 2007, this denial was nevertheless “remedied” or “superseded” by the decision to reconvene the Panel to consider the further evidence as to financial capability as conveyed to Mr Russell-Taylor by the letter dated 8 November 2007, by the reconvened meeting of the Panel on 5 December 2007, and by the ultimate decision evidenced by the letters dated 24 January 2008 to make offers pursuant to reg 55(2) in accordance with the assessment of the Panel.

20. My understanding of Mr Russell-Taylor’s complaint is that it was the information contained in the CDA letter dated 13 September 2007 evidencing his $10 million facility which he was denied the opportunity of providing for consideration of the Panel and prior to the decision evidenced by the letters dated 3 October 2007.  I proceed on that basis.[85] 

    [85]   I consider below whether Mr Russell-Taylor complains that there was other evidence available to him beyond the CDA letter which he was denied the opportunity of bringing forward.

21. The minutes of the meeting of the Panel on 5 December 2007 state that the Panel had been reconvened on advice from the Crown Solicitor’s Office, that the Panel was asked to address and discuss concerns of Mr Russell-Taylor in relation to his provision of information on financial capability to carry out the proposed exploration and that the Panel reviewed the content of his letter dated 19 September 2007 (which enclosed the CDA letter dated 13 September 2007).

22. The question for determination, therefore, is whether Dr Tyne (and the Panel as the body making the recommendations to him) gave consideration to the CDA letter dated 13 September 2007 and to Mr Russell-Taylor’s letter dated 19 September 2007 in making the final recommendation/decision.  Consideration of this question is complicated by the fact that it is not entirely clear from the minutes and from Dr Tyne’s evidence as to the precise consideration given to it by the Panel, the fact that the Panel did not reconsider all 6 criteria afresh and the fact the Mr Russell-Taylor had not only provided evidence of his financial capability with his letter dated 19 September 2007 but also increased his exploration expenditure from $4.75 to $6.85 million over 18 months to $10 million over 12 months. 

    Technical aspects

23. At the meeting in December 2007, the Panel identified that 4 of the 6 criteria were not impacted by financial aspects.  Those aspects were the exploration program, technical expertise, geological and mineralisation models and type and range of commodities.  The Panel had allocated a maximum score for these criteria of 17 points out of 25. 

24. It is evident that the Panel did not reconsider these 4 criteria.  In the circumstances, I consider that the Panel (and Dr Tyne) was not required to do so.

    Financial capability

25. The Panel allocated a maximum score of 3 points for financial capability.  In August 2007, it had awarded 2 points to Mr Russell-Taylor, being the same points awarded to Mintech, Mawson and Goldus.  Dr Tyne’s evidence (in conjunction with the record of the August meeting) suggests that the Panel proceeded on the assumption that Mr Russell-Taylor could provide confirmation of funding backing up his proposed exploration expenditures, even though he had supplied no independent evidence of the type referred to in the Information Brochure.  The Panel in August 2007 had awarded PepinNini the maximum score of 3 points on the basis that it was a publicly listed company which had recently completed a joint venture with a major Chinese mining company. 

26. The minutes of the Panel meeting in December 2007 do not disclose whether the Panel awarded a revised point score to Mr Russell-Taylor for financial capability.  The minutes merely note that the financial capability of Mr Russell-Taylor was not a deciding factor.  One additional point would still have left Mr Russell-Taylor with a lower aggregate scores than the “successful” competitors. 

27. The conclusion of the Panel expressed in the minutes as the “decision” was that the Panel “confirmed that the latest information provided by Mr Russell‑Taylor has no material effect on the original ranking of preferred applicants” and “the original decision of the Panel, dated 31 August 2007, has not changed.”

28. On the face of the minutes, it is possible that either the Panel confirmed in December its previous allocation from August of 2 points to Mr Russell‑Taylor (on the basis that it had presumed in August what it subsequently received in September) or alternatively that the Panel did not award a revised score but, if it had done so, it would have awarded 3 points to Mr Russell‑Taylor. 

29. Dr Tyne’s evidence, while not explicit, implies that the Panel awarded, or would have awarded, 2 points to Mr Russell‑Taylor in December 2007 on the basis of the CDA letter.  Thus, Dr Tyne gave evidence that “the receipt of this document [the CDA letter] confirmed PIRSA’s view that the applicant, Mr Neil Russell‑Taylor, had appropriate financial backing to undertake the proposed program of work”;[86] that “this letter of 19 September confirmed the financial capability and backing for the applicant, but in terms of the deliberation of the Panel initially there was, although there was not documentary evidence of that, the Panel basically expected or gave the benefit of the doubt to the applicant that financial backing would be forthcoming”[87] and that “the assessment of this application the assessment of financial capability was – was accepted as a result of that sentence, that last sentence in your letter [the letter of 9 August 2007], and that acceptance and ranking in the documentation is included in the table.”[88]

    [86]   T583.

    [87]   T588.

    [88]   T611.

30. In these circumstances, I find that the Panel decided in December 2007 that the original award of 2 points to Mr Russell‑Taylor was still appropriate in light of the CDA letter. 

    Proposed Expenditure

31. The Panel in December 2007 identified proposed expenditure as the other criterion potentially affected by the further information from Mr Russell-Taylor.

32. The Panel allocated a maximum score of 5 to proposed expenditure.  In August, it had awarded Mr Russell-Taylor 2 points (except in respect of area 3 for which he was awarded 1 point) in respect of each of the 5 areas.  In respect of area 1, this was on the basis of Mr Russell-Taylor’s original proposed expenditure figure of $170,000 (for a larger area which encompassed area 1).  In respect of areas 2 and 3, the Panel considered Mr Russell-Taylor’s proposed expenditure of $4.75 to $6.85 million to be unrealistic and less achievable than the competitors.  In respect of areas 4 and 5, the Panel considered Mintech’s proposal to spent $148,100 specifically over those 2 areas more appropriate than a much larger figure from Mr Russell-Taylor over a much larger area.

1. I interpolate at this point 3 comments:

   1.Mr Russell-Taylor, in closing address, criticised the use by the Panel of the outmoded figure of $170,000 in respect of area 1, when it had been superseded by the 9 August 2007 combined figure for both applications of $4.75 to $6.85 million.  This would be a valid complaint if the task of the Court were to conduct a merits review, and it might or might not be a valid contention if Mr Russell-Taylor were seeking judicial review of the Panel’s recommendation on the basis of relevant/irrelevant considerations and/or Wednesbury unreasonableness.  However, this is not the case and the error by the Panel (if it be an error) is irrelevant. 

   2.The minutes of the Panel meeting of December 2007 indicate that the Panel did not carefully read Mr Russell‑Taylor’s letter dated 19 December 2007, which stated that proposed expenditure had been increased to $10 million, because the minutes record that the letter dated 19 September 2007 “states that initial funds at $4-6 million would be expended on the exploration program.”  However, Mr Russell‑Taylor did not make a complaint in this regard and in any event this error by the Panel is irrelevant because the task of the Court is not to conduct a merits review, nor is Mr Russell‑Taylor seeking judicial review of the Panel’s recommendation on the basis of relevant/irrelevant considerations and/or Wednesbury unreasonableness.

   3.In comparing lower levels of expenditure by the other competitors over much smaller and specific areas with a larger level of expenditure by Mr Russell-Taylor over a much larger area, the Panel was not comparing apples with apples.  It may be arguable that Mr Russell-Taylor had not been given an opportunity to identify proposed expenditure (or indeed details relevant to the other 5 criteria) in respect of each of the 5 areas the subject of competition (and that in this respect he was at a disadvantage compared to the Goldus group).  For similar reasons, these matters are not relevant. 

2. When the Panel reconsidered the matter in December 2007, the minutes noted that “total expenditure stated by the applicant is not always a deciding factor”.[89]  In this respect, even if Mr Russell-Taylor had been allocated the maximum score of 5 for proposed expenditure, his aggregate points would still have been less than PepinNini and Mintech in respect of areas 2, 3 and 4. However, his aggregate points would have equalled Mawson (and exceeded it if he had received 3 points for financial capability) in respect of area 1 and would have equalled Mintech if he had also received maximum points for financial capability in respect of area 5.

   [89]   P2 at page 103.

3. Again, the minutes of the Panel meeting of December 2007 do not identify a revised point score for proposed expenditure for Mr Russell-Taylor.  The minutes record “the Panel must be convinced that the proposed expenditure is realistic, achievable and warranted for the proposed program and exploration targets for the first year of tenure.” 

4. In the circumstances, I find that the Panel concluded that the increase in the proposed expenditure did not increase the points to be allocated to Mr Russell‑Taylor for the same reasons originally identified by the Panel in August 2007, namely that the expenditure was considered by the Panel not to be realistic, achievable or warranted.

   Other evidence of financial capability

5. Mr Russell-Taylor in his evidence referred to the fact that around August/September 2007 he was negotiating with up to 6 separate groups of financial backer/financiers.[90]  Mr Russell‑Taylor said that there were 2 principal consortia (or joint ventures), who were interested in coal and gold respectively.[91]

   [90]   T169.

   [91]   T205.

6. The defendants contended that Mr Russell‑Taylor only referred in his communications with the Department to a single financial backer, and did not lead the Department to believe that he had available or could obtain evidence of financial backing from financiers other than CDA.

7. I did not understand Mr Russell‑Taylor to contend that he had been denied the opportunity to submit evidence of financial capability from any financier other than the CDA consortium, or that he had available in August or September 2007 any such evidence.  In any event, Mr Russell‑Taylor did not produce to the Department any such evidence in response to the letter from the Crown Solicitor’s Office dated 8 November 2007.  In these circumstances, the question of evidence from financiers or backers other than the CDA consortium does not arise.

   Overall consideration

8. The minutes of the Panel meeting of August 2007 indicate that the Panel and Dr Tyne did not see their task as going beyond adding up the total scores and recommending the applicant with the higher score.  If the Panel had allocated a higher aggregate score to Mr Russell-Taylor than the competitors for a given area, I find that it is likely that the Panel would have recommended him as the preferred applicant and Dr Tyne would have accepted that recommendation.

   Conclusion

9. I am not called upon to conduct a merits review of the Panel’s recommendation of December 2007, nor to determine whether it took into account irrelevant considerations, ignored relevant considerations, made a decision so unreasonable no reasonable person could have made it or otherwise made an error susceptible of challenge on the usual judicial review grounds.  The sole question I have to determine is whether or not the Panel (and in turn Dr Tyne) took into account the information as to financial capability provided by Mr Russell-Taylor in September 2007.

10. In circumstances in which Mr Russell-Taylor’s complaint of denial of procedural fairness is as to evidence of financial capability (as opposed to proposed expenditure), the evidence of financial capability apparently having been assumed by the Panel in August 2007 in Mr Russell-Taylor’s favour, the higher proposed expenditure apparently being considered by the Panel in December 2007 to be no more realistic, achievable or warranted than the previous proposed expenditure considered in August 2007 and the fact that 1 additional point which the Panel might have awarded to Mr Russell-Taylor on the financial capability criterion would not have affected the relative aggregate scores of the competitors, I conclude that the Panel and Dr Tyne did take into account the further information as to financial capability provided by Mr Russell-Taylor in September 2007.

11. In those circumstances, I accept the contention by the defendants that Mr Russell-Taylor was not denied procedural fairness in relation to the January 2008 decision by reason of the Panel and Dr Tyne previously in August 2007 not having considered evidence of his financial capability which he then wished to provide.

12. Accordingly, I reject this ground of judicial review.

    Conclusion and Relief

13. The defendants conceded that Mr Russell-Taylor was entitled to procedural fairness by way of being given an opportunity to make submissions to the Minister prior to a decision being made to proceed with a merits based decision as opposed to a first come first served based decision.  Mr Russell-Taylor was given that opportunity by letter dated 15 August 2007 and took up that opportunity by his solicitor’s letter dated 23 August 2007, but Dr Tyne proceeded to make a decision using a merits based approach without ever having considered Mr Russell-Taylor’s objections or made a decision that it was appropriate not to decide the question on a first come first served basis.

14. In those circumstances, the decision(s) evidenced by the letters dated 24 January 2008 is(are) void.

15. The decision(s) to issue the licences, evidenced by the execution by the Minister of the new Mintech, Mawson and Goldus licences on 13 September 2011, is(are) consequentially affected.

16. The appropriate relief is by way of certiorari quashing the relevant decisions.  It is not appropriate to make an order directing the Minister to issue licences to Mr Russell-Taylor because I have held that Mr Russell‑Taylor has no such entitlement.  Rather, it is appropriate to direct the Minister to make a decision according to law.  Based upon my reasons, in order to do this, the Minister will need to give consideration to Mr Russell‑Taylor’s objections and comments identified in his solicitor’s letter dated 23 August 2007.

17. I do not consider that it is appropriate to grant the declaratory relief sought by Mr Russell-Taylor as it would serve no purpose given the orders I have foreshadowed above.

18. I will hear the parties as to the precise terms of relief.