Sykes v Minister for Mines and Energy and Queensland Gas Company Limited
[2008] QLAC 201
•10 November 2008
LAND APPEAL COURT OF QUEENSLAND
CITATION:Sykes v Minister for Mines and Energy and Queensland Gas Company Limited [2008] QLAC 0201
PARTIES:Ian Grant Sykes
(appellant)
v
Minister for Mines and Energy
(first respondent)
and
Queensland Gas Company Limited
(second respondent)
FILE NOS:LAC2007/0859 and LAC2008/0024 from
PGC86/2007 and PGC114/2007
DIVISION:Land Appeal Court
ORIGINATING COURT: Land Court
DELIVERED ON: 10 November 2008
DELIVERED AT: Brisbane
MEMBERS:White J
Mr JJ Trickett
Mr RS Jones
ORDER:Appeals numbered LAC 2007/0859 and LAC 2008/0024 are dismissed
CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – WHEN APPEAL LIES – FOR BIAS IN JUDICIAL PROCEEDINGS – the appellant submitted that the learned Member was biased and that the appellant was denied a fair hearing – the allegations of bias are said to be based on many matters, including permitting an improper cross-examination of the appellant – whether the allegation of bias is substantiated
APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN AN APPEAL LIES – ERROR OF LAW – WHAT IS – GENERALLY – the appellant submitted that the learned Member made multiple errors of law – whether the learned Member failed to decide the case according to equity, good conscience and the substantial merits of the case – whether the learned Member made any error of law
STATUTES – ACTS OF PARLIAMENT – OPERATION AND EFFECT OF STATUTES – GENERAL MATTERS – OTHER MATTERS – the appellant was the holder of two petroleum leases - the Petroleum Act 1923 (Qld) proscribes conditions which must be met for the renewal of a petroleum lease – the appellant did not comply with the conditions – the Minister for Mines and Energy sent the appellant letters which referred to the appellant as the holder of the leases after the date for renewal had passed – whether these letters created any rights for the appellant
Constitution of Queensland 2001
Land Court Act 2000 (Qld), s 7
Land Title Act 1994 (Qld), s 37, s 184,
Petroleum Act 1923 (Qld), s 2, s 31A, s 34, s 40, s 50, s 45, s 47, s 48, s 80A, s 80B, s 80C, s 80D, s 80T
Petroleum and Gas (Production and Safety) Act 2004 Qld), s 113, s 115, s 116,
Australian Broadcasting Commission v Redmore Pty Ltd (1987) 11 NSWLR 621, cited
Clyne v East [1967] SR (NSW) 285, cited
Cox v The Commissioner of Water Resources [1992] 14 QLCR 314, followed
Cudgen Rutile (No 2) v Chalk [1975] AC 520, cited
Dovade Pty Ltd & Ors v Westpac Banking Group & Anor (1999) NSWCA 113, cited
Ebner & Ors v Official Trustee in Bankruptcy & Anor (2001) 205 CLR 337, cited
Galea v Galea (1990) 19 NSWLR 263, cited
Gilbertson Estate of South Australia [1978] AC 772, cited
Johnson v Johnson (2000) 174 ALR 655, cited
New South Wales v Bardolph (1935) 52 CLR 455, cited
Sykes v Minister for Mines and Energy & Anor [2007] QLC 00138, related
Sykes v Minister for Mines and Energy & Anor [2008] QLC 0069, related
Sykes v Queensland Gas Co. Ltd (2007) QCA 277, related
APPEARANCES: Mr IG Sykes appeared in person
Mr G Sheahan for the first respondent
Mr J McKenna SC and Mr D Kelly SC for the second respondent
SOLICITORS: The Crown Solicitor for the first respondent
Corrs Chambers Westgarth for the second respondent
The appellant, Mr Sykes, has brought appeals from two decisions in the Land Court. The first[1] is against the decision of the Land Court of 19 December 2007 dismissing his applications for summary judgment and orders for a new trial. The second[2] is an appeal against the decision of the Land Court of 23 April 2008 determining a preliminary question and ordering that proceedings PGC86/2007[3] and PGC114/2007[4] brought by Mr Sykes be dismissed. The issue at the centre of these proceedings which was the preliminary question determined by the learned Member is whether or not at any time after 26 April 2006 Mr Sykes had subsisting tenure or the right to tenure in the area of the subject petroleum leases Nos 72 and 73.
PL72 and PL73 were statutory leases granted by the Governor-in-Council on 27 April 1995 for a five year term.
[1] LAC 2007/0859, relating to [2007] QLC 00138.
[2] LAC 2008/0024, relating to [2008] QLC 0069.
[3] Against the first respondent, Minister for Mines and Energy.
[4] Against the second respondent, Queensland Gas Co Limited.
The relevant statutory provisions
Section 34 of the Petroleum Act 1923 (the Act) (subsequently renumbered s 48) relevantly provided:
“34(1) The lessee shall each year expend on the lease in respect of drilling for petroleum or such other work as the Minister may in writing approve a total sum of money calculated at the rate of $1 550 per square kilometre for each square kilometre or part thereof contained in the lease.
(1A) The total sum is to be reduced by the value at the wellhead, as agreed or determined under s.40C, of all petroleum produced from a lease in the year.
(1B) Subsections (1) and (1A) are complied with in relation to each of the leases that are subject to a unitisation arrangement under section 41A if those subsections are complied with in relation to the leases taken as a whole.
(1C) The Minister may grant exemption in writing from the requirements of subsection (1) for such period and under such circumstances as the Minister may fix.
...”
The entitlement of a lessee to renew a petroleum lease was contained in s. 31A (subsequently renumbered s 45), and provided:
“31A(1)The lessee of a lease who has substantially complied with this Act, and the terms and conditions of the lease, in relation to that lease, is entitled at the expiration of the lease, subject to subsection (2), to a renewal of the lease.
(2)A lessee referred to in subsection (1), before the extension of the lease is to—
(a) declare whether deposits of petroleum, that the lessee believes on reasonable grounds to be payable, exist within the land the subject of the lease; and
(b) lodge with the Minister a proposed program for producing petroleum from any field within the land.
(3)The renewed lease must be for a term no longer than the period nominated (with reasons for the nomination) by the lessee at the appropriate term for producing in an economically viable way the petroleum from the fields within the land the subject of the lease.
(4)The law relating to the amount and payment of royalties and of rent in force at the time of the renewal applies to the renewed lease.”
Background
Mr Sykes, a petroleum geologist, has been involved in petroleum exploration in the Surat Basin south-east of Miles since the 1960s. He claims to have found the world’s first commercial coal bed methane gas field, which he designated “XYLOLEUM”. He also claims to have discovered a new commercial oil field, which he designated “XYL-X”. Production wells were drilled on both fields.[5]
[5] AR 301-306.
On 1 March 1979, XLX NL, a company of which Mr Sykes was director and only shareholder, was granted Authority to Prospect 260P (ATP260P) for four years, which was renewed in 1983, 1987 and 1991. By 1984, the only drilling work on what was to become Petroleum Lease 72 (PL72) was completed. By 1990, the only drilling work on what was to become Petroleum Lease 73 (PL73) was completed.[6]
[6] AR 604-5.
On 24 September 1993, XLX NL applied for two petroleum leases from ATP260P for a period of 21 years.[7] On 27 April 1995, PL72 and PL73 were granted with areas of 18.4 km² and 6.11 km² respectively.[8] However, despite representations by XLX NL, the term of each petroleum lease was for five years, not 21 years as sought. PL72 was targeting coal seam gas in the XYLOLEUM gasfield and PL73 was targeting conventional oil in the XYL-X oilfield. Mr Sykes claims that the investment on production facilities on PL72 was $1,250,000 “in 1969 to 1995 money values”, and for PL73, $2,000,000 on the same basis.[9]
[7] AR 544-549.
[8] AR 536-537.
[9] AR 381.
Mr Sykes claims that the overall investment in PL72 and PL73 was $17,000,000 “in terms of money values expended” on exploration in the late 1960s to the early 1990s. He asserts that “[a]t the present market prices” the areas of PL72 and PL73 should realise about $200,000,000 in production.[10]
[10] AR 383.
On 17 May 1995, XLX NL executed an instrument of transfer of PL72 and PL73 to Mr Sykes. On 20 July 1995, an instrument of transfer was forwarded to the Department of Mines and Energy (the Department)[11] for approval and on 22 May 1996, the Department advised Mr Sykes that the transfer of the petroleum leases had been approved on 15 April 1996.[12]
[11] The Department then responsible for the administration of the Petroleum Act 1923. The name of the Department has changed over the relevant period.
[12] AR 717-718.
Mr Sykes applied to the Department on 22 December 1999 to renew PL72 and PL73 for a term of five years commencing on 26 April 2000, enclosing cheques for the rent for the first year of the renewal period of each petroleum lease.[13] On 17 February 2000, the Department advised Mr Sykes of the statutory requirements for renewal in ss 45 and 48 of the Petroleum Act and requested further information.[14] Mr Sykes responded on 28 February 2000, declaring there were “payable” deposits on each petroleum lease and providing certain information.[15] However, there was no action by the Department to process those applications.
[13] AR 719-720.
[14] AR 558.
[15] AR 559-567.
The five year terms of PL72 and PL73 expired on 26 April 2000. On 4 August 2004, Mr Sykes wrote to the Department requesting a renewal of the two petroleum leases for a further five years, commencing on 27 April 2005. He stated that “[t]hese leases were renewed until 26th April 2005”.[16] The previous renewal applications still had not been assessed, although Mr Sykes had continued to pay and the Department to accept the rent for PL72 and PL73.
[16] AR 901-902.
It was not until 21 March 2006 that the Department responded to Mr Sykes’ renewal applications, advising that they were currently being assessed pursuant to s 45 of the Petroleum Act to determine whether they complied with the requirements for renewal. The letter same asserted that there were indications that Mr Sykes had not substantially complied with the terms and conditions of the petroleum leases for the first five year term in that:
“1.No production or development activities have been undertaken on either of the leases since their grant, and as such the initial development plans have not been complied with.
2.The expenditure commitment of $1 550 per km² of the leases, pursuant to section 48 of the Act, has not been satisfied and no exemptions have been sought.
3.The reporting requirements under the Act have not been substantially complied with.”[17]
Mr Sykes was asked to provide a written submission detailing how he had substantially complied with the terms and conditions of the petroleum leases and why those leases should be renewed.[18]
[17] AR 723.
[18] AR 723
Mr Sykes responded on 28 March 2006, denying that he had not complied with any production, development or reporting requirements. He claimed that the expenditure requirement had been met in each and every year, claiming a deemed fee for the administration of each lease of $20,000 per year for PL73 and $25,000 per year for PL72. He also suggested that an expense might also be claimed for depreciation of about $60,000 per year and over $100,000 per year, on the value of his investments on PL72 and PL73 respectively, plus other costs. He maintained that no exemptions were sought because he was in excess of expenditure requirements in each year and had otherwise wholly complied with the requirements of the Department and the Act.[19]
[19] AR 724-731.
On 17 November 2006, the Minister for Mines and Energy advised Mr Sykes of his intention to take non-compliance action under s. 80T of the Act to cancel the tenures of PL72 and PL73 because of Mr Sykes’ failure to comply with the terms and conditions of the leases and the provisions of the Act. The grounds of the proposed non-compliance action included:
·No development or commercial production had occurred on either of the leases since they were granted as required by s 40 of the Act.
·The program for development and production had not been complied with as required by s 50(1) of the Act, as no work or development or commercial production had been conducted on the leases.
·No work has been conducted on the leases to extract or produce petroleum as required by s 47(d) of the Act and no exemptions had been sought.
·No expenditure had been made on drilling each year as required by s 48(1) of the Act and no exemption had been sought.
Mr Sykes was invited to make submissions to the Department concerning the Minister’s proposal to take non-compliance action.[20]
[20] AR 328-329.
Mr Sykes responded to the Minister’s notice on 21 November 2006, addressing each of the grounds, arguing that commercial production had occurred, referring to production activity carried out after 26 April 2000 by entities other than himself. He also claimed that he had already undertaken his development work and did not necessarily need to do any more. He also pointed out that both PLs were of “shut in developed” status, as each contained a development hole capable of production. He continued to deny that he had not complied with the requirements of the Act and accused the Minister, if there were any default, of causing it by failing to give him title which would allow him to raise money to develop the leases.[21]
[21] AR903-917.
It was not until 30 March 2007 that the Minister responded. He advised Mr Sykes that he had not provided substantive reasons to refute the grounds for non-compliance action and that he was cancelling PL72 and PL73 in accordance with s. 80Y of the Act. The Minister further advised Mr Sykes that his decision did not take effect until the end of the appeal period and that if Mr Sykes wished to appeal he could do so by filing a notice with the Land and Resources Tribunal (the LRT).[22] Mr Sykes contends that it is impermissible to go behind this letter which implicitly acknowledges the continued existence of PL72 and PL73.
[22] AR 350-351.
On 18 April 2007, Mr Sykes commenced appeal proceedings PGC86/2007 in the LRT.[23]
[23] AR 301-376 and 377-396.
Claims by Mr Sykes against Queensland Gas Company Limited
Queensland Gas Company Limited (QGC) commenced drilling its Argyle 1 Well on 19 January 2001, on what became Petroleum Lease 179. It commenced drilling its Berwyndale South 1 Well on 14 June 2002, on what became Petroleum Lease 201.[24] Those dates are significant as both drillings occurred after 26 April 2000, the date upon which PL72 and PL73 are alleged to have expired.
[24] Affidavit of Susan Ann Boxhall AR 751.
On 13 December 2006, Mr Sykes commenced proceedings in the Supreme Court against QGC, for orders to compel QGC to rename its wells and claiming his share on the coal bed methane gas, contending that its wells were tapping into the same reservoir as was covered by PL72, notwithstanding PL72 is situated about 4 km to the east of QGC's PL201.
On 21 December 2006, Muir J (as his Honour then was) heard an application by QGC to strike out Mr Sykes’ statement of claim. At this hearing, his Honour ruled that the statement of claim did not satisfy the requirements of the Uniform Civil Procedure Rules 1999. It was struck out with liberty to Mr Sykes to apply within 60 days to file and serve an amended statement of claim which was compliant.
On 5 February 2007, Mr Sykes filed an application for leave to amend the statement of claim and on 1 March 2007 QGC filed a cross-application to strike out Mr Sykes’ proceedings. These applications were heard by Muir J on 7 March 2007 and on 8 March 2007 he struck out the proceedings on the ground that the amended statement of claim demonstrated no reasonable cause of action.
On 12 March 2007, Mr Sykes commenced fresh proceedings against QGC claiming the payment to him at the spot-price of gas that came, or is likely to come, from part of the reservoir under PL72 and an injunction restraining QGC from producing gas from its wells on PL201, Berwyndale South. Mr Sykes based these proceedings on the provisions of the Petroleum and Gas (Production and Safety) Act 2004 (the Production Act), which relevantly provides:
“This subdivision applies if a natural underground reservoir in the area of a petroleum lease extends to—
(a)the area of an adjacent petroleum lease … .”[25]
“The petroleum lease holder must not carry out a relevant activity for an adjacent lease or proposed adjacent lease unless—
(a)the adjacent holder … has consented in writing to the carrying out of the activity … ”[26]
The term “relevant activity” is defined to mean the production under the petroleum lease of petroleum that comes, or is likely to come, from the part of the reservoir that is in the area of an adjacent lease.[27]
[25] s 113.
[26] s 115(1)
[27] S 115(3)
QGC applied to strike out the statement of claim and/or the proceedings, on the basis that the claim was not properly pleaded and could not be made good. QGC contended that gas can be extracted from only a relatively small radius and that it is impossible, given the geology of the ground, that gas could come from beneath PL72.
When the application came on for hearing on 15 June, Chesterman J, while observing that the matter was complex and would depend upon the opinions of expert geologists and mining engineers, doubted that Mr Sykes was the lessee of PL72 since in all likelihood it expired in 2000. His Honour struck out the statement claim and stayed the Supreme Court proceedings pending determination of the dispute between Mr Sykes and the State of Queensland in the LRT as to his entitlement to PL72.[28]
[28] PGC 86/2007 commenced in the LRT 18 April 2007 (AR 299-300). His Honour further ordered that Mr Sykes file and serve a report from an expert independent of the parties, showing the existence of facts from which the claim could be based before the stay would be lifted.
Mr Sykes appealed the orders made by Muir J on 8 March 2007 and the orders made by Chesterman J on 15 June 2007. Those appeals were heard together by the Court of Appeal on 3 August 2007 and, on 24 August 2007, that Court dismissed each of the appeals with costs.[29]
[29] [2007] QCA 277.
Before those appeals were heard, Mr Sykes commenced another proceeding against QGC in the LRT pursuant to s. 116 of the Production Act, seeking an order as to the amount of coal bed methane gas allegedly owned by Mr Sykes produced from PL201 and consequential orders about production.[30]
[30] PGC 114/2007 commenced in the LRT 18 June 2007 (AR 397).
The position now is that Mr Sykes’ Supreme Court proceedings against QGC remain on foot, but stayed until the determination of Mr Sykes’ title as a lessee to PL72, and he provides a report from an expert.
The appeal by Mr Sykes against the decision to cancel PL72 and PL73
Following a directions hearing by the LRT on 3 May 2007, a stay of the Minister’s decision to cancel PL72 and PL73 was granted. Mr Sykes filed an amended application to the LRT on 8 May 2007.[31] The relevant jurisdiction of the LRT was transferred to the Land Court on 21 September 2007.[32] After that date, proceedings which were commenced in the LRT were continued in the Land Court.
[31] AR 377.
[32] Land Court and Other Legislation Amendment Act2007.
On 11 October 2007, the Land Court ordered by consent that the following question be heard in both PGC 86/2007 and PGC 114/2007, before any other issue in those proceedings:
“Whether or not at any time after 26 April 2000 the applicant had subsisting tenure or the right to tenure in the area the subject of petroleum lease numbers 72 and 73.”[33]
[33] AR 445, [2008] QLC 0069l.
The first appeal (LAC 2007/0859)
The preliminary question as to whether or not Mr Sykes had tenure of the two petroleum leases was heard by the Land Court over three days from 26 to 28 November 2007. While that decision was still reserved Mr Sykes applied to the Land Court seeking orders for summary judgment in the proceedings, or, alternatively, an order that a new trial take place to determine the preliminary question. The application was dismissed with costs on 19 December 2007[34] and Mr Sykes appeals to this Court.
[34] AR 435, [2007] QLC 00138.
The application for summary judgement was based on the letter from the Minister to Mr Sykes dated 30 March 2007 cancelling both petroleum leases for non-compliance in accordance with s.80Y of the Act[35] and advising that the decision did not take effect until the end of the appeal period. Mr Sykes asserted in his notice of appeal,[36] that neither of the respondents had any evidence in the hearing of the preliminary question that would “alter, change, modify, delete from or add to” the letter from the Minister. Therefore, he contended, the separate question never arose and the trial of that question is aborted and void and cannot be of legal effect.
[35] AR 350-351.
[36] AR 441-443.
Mr Sykes further contended that it was in the public interest “regarding the efficiency of the judicial process” that he took the action (presumably the bringing of these applications), which he argued are justified under s.7 of the Land Court Act 2000, the equity and good conscience provisions.
The question of the effect of the Minister’s letter was one of the principal issues on the hearing of the preliminary question and there was no legitimate basis for bringing the application for summary judgment prior to judgment. Mr Sykes’ alternative application for a new trial concerning the preliminary question seems to be based on his allegations concerning the conduct of counsel for the second respondent and the alleged bias of the learned Member in conducting the hearing. Both of these issues are grounds of appeal in the substantive appeal and are discussed below. In our view, the learned Member was correct in dismissing that application.
The applications by Mr Sykes were clearly misconceived. We agree with the learned Member below that it was a frivolous exercise and a waste of the Court’s time and resources. The award of costs was discretionary and the discretion did not miscarry.
Mr Sykes’ appeal against the decision of the Land Court of 19 December 2007 should be dismissed.
The second appeal against the determination of the preliminary question
On 23 April 2008, the Land Court delivered its decision on the preliminary question as to whether or not at any time after 26 April 2000, Mr Sykes had any subsisting tenure or right to tenure in the area of PL72 and PL73. The learned Member concluded that he did not and ordered that proceedings PGC 86/2007 and PGC 114/2007 be dismissed. Mr Sykes appealed that decision on 24 April 2008, the notice of appeal being accompanied by an affidavit. Further affidavits were filed on 28 and 30 April 2008.
Mr Sykes’ grounds of appeal are contained in several documents. Counsel for QGC has identified three broad categories and, since some of the grounds are substantially repetitious, it is convenient to adopt that approach. They are:
(i)errors of law;
(ii)allegations of bias and denial of natural justice; and
(iii)factual errors.
Alleged errors of law
Embarking on the Preliminary Hearing
Mr Sykes’ complains that the learned Member erred in embarking upon a hearing of the preliminary question. That complaint seems to be based on Mr Sykes’ contention that to do so would deny the effect of the Minister’s 30 March 2007 letter, the same point on which Mr Sykes relied for bringing his application for summary judgment. All parties agreed that the preliminary question should be heard and determined as a preliminary question. Accordingly this complaint has no substance. The status of the Minister’s letter(s) is discussed below.
The Renewal Precondition
Mr Sykes contends that the learned Member decided the preliminary question on tenure incorrectly because he relied upon a strict interpretation of the Petroleum Act, whereas, he was required to act according to “equity, good conscience and the substantial merits of the case.”[37] That contention seems to have arisen from the statement by the learned Member at paragraph [85] of his judgment where, after considering whether or not there had been substantial compliance with the statutory pre-conditions for renewal of a petroleum lease, he said:
“… Accordingly, in my view, looked at objectively, the pre-condition essential for renewal of each lease was not met. Accordingly, on a strict interpretation of the Petroleum Act 1923 as in force at the time of expiry of the original term of each petroleum lease, the petroleum leases could not be renewed. …”[38]
[37] The approach mandated in the s 7 of the Land Court Act 2000 .
[38] At [85].
The scope of what is now contained in s.7 of the Land Court Act was considered by this Court in Cox v The Commissioner of Water Resources[39] and the cases discussed therein:
“Whatever flexibility section 41(5)(a) of the Land Act 1962 [the predecessor to s.7 of the Land Court Act 2000] gives to the Land Court in making its decisions, it is clear that the paragraph does not give the Court power to deal with matters according to some arbitrary concept which is unknown to or unascertainable by the parties. The provisions of the relevant statutes must be observed. The Court cannot ignore or act contrary to statutory requirements or basic principles of natural justice. In that sense, at least, section 41(5)(a) does not empower the Court to depart from established principles of law nor does it give it power to dispense justice otherwise than according to law.”[40]
The provisions of s 7 cannot assist Mr Sykes if he failed to comply with the requirements of the Petroleum Act. Whether or not Mr Sykes has complied with those requirements is a matter of fact to be determined on what was, in effect, uncontested documentary evidence.
[39] [1992] 14 QLCR 314.
[40] At 320.
As pointed by the learned Member below, the statutory provisions are clear. Provided Mr Sykes complied with the Petroleum Act and the terms and conditions of each lease, at the expiration of each lease, he was entitled to a renewal of each of them. After considering various authorities on the matter, the learned Member concluded:
“By Mr Sykes’s own submissions as set out earlier, he did not undertake drilling activities during the five year terms of each petroleum lease as he was required to do. Mr Sykes provides various reasons for his default in this regard. Further, Mr Sykes also acknowledges that the opportunity existed for him to obtain certain exemptions from the Minister with respect to his expenditure requirements, but that he never at any time sought those exemptions. At the end of the day, much of Mr Sykes’s evidence in this matter relating to substantial compliance goes to the very reasons that could properly have been placed before the Minister by Mr Sykes in seeking an exemption on expenditure. I cannot accept Mr Sykes’s submission that he did not seek the exemptions from the Minister because ‘it would be a waste of the department’s time and resources to pester the Minister for Mines and Energy’ with an application for exemption for PLs 72 and 73.”[41]
The learned Member did not accept Mr Sykes’ explanation and concluded that he had not substantially complied with the provisions of the Petroleum Act or the terms of the leases, whatever test of substantial compliance was applied, and noted that Mr Sykes did not apply for ministerial exemption.
[41] At [57].
Mr Sykes now seeks to have this Court overturn that decision. He admits that he did not undertake drilling activities during the five year terms of each petroleum lease as he was required to do. However, he contends that the extensive development work which he had undertaken prior to the granting of the leases, plus other expenditure which he had undertaken, would be sufficient to have him exempted from the expenditure requirements each year. Mr Sykes bases his contentions on the instruments of lease themselves and quotes the following extract:
“… with the entitlement to renew the same for a term no longer than the period nominated …”[42]
Mr Sykes reasons that the instruments of lease grant him a clear and unqualified right to another term of five years for each lease after 26 April 2000. He contends that he had exercised the right by his application for an extension of each lease in his letter received by the Department on 22 December 1999. Therefore, he claims, he had the right to tenure of PL72 and PL73 after 26 April 2000 and that the Land Court was in error in finding that they had expired and he had no entitlement to a renewal of either lease.
[42] AR 317.
Mr Sykes has selectively quoted from the lease documents. The opening paragraph of each instrument is as follows:
“WHEREAS XLX NL in Our State of Queensland, in pursuance of the provisions of the Petroleum Act 1923 (hereinafter referred to as “the said Act”), is now entitled to a lease of the land described in the Schedule endorsed on these presents for the term of Five years from the Twenty-seventh day of April, 1995 (with the entitlement to renew the same for a term no longer than the period nominated as hereinafter provided) at the rent and upon the payment of royalty hereinafter mentioned and with, under and subject to the reservations and conditions hereinafter contained and the rights, powers, privileges, terms, conditions, provisions, exceptions, restrictions, reservations, and provisos in the said Act or any Acts amending the same and in Regulations made or to be made thereunder.”
When the extract from the instrument of lease is read in its proper context, it is clear that the entitlement to renewal in each lease is subject to the provisions of the Petroleum Act, including what is now s.48.
In our view, there can be no doubt that Mr Sykes has not substantially complied with the provisions of the Act. There is no dispute that he had not expended the required amounts on drilling during the period of the leases, nor had he sought any exemptions. The learned Member was correct to conclude that each of the leases expired on 26 April 2000 and that at the time of their expiry, Mr Sykes had no entitlement to a renewal of either lease.
The Effect of Cancellation – The Minister’s Letters
Mr Sykes placed significant weight on the Minister’s letters of 17 November 2006[43] and 30 March 2007.[44] Both refer to Mr Sykes as the holder of petroleum authorities and the holder of PL72 and PL73. In the letter of 17 November 2006 the Minister proposed to take non-compliance action against Mr Sykes under the Petroleum Act. The grounds for the proposed action are set out and Mr Sykes was given twenty days to make submissions in response. The Minister’s letter of 30 March 2007 stated that pursuant to s.80Y of the PetroleumAct, the decision of the Minister was to cancel the petroleum leases. This was because the submission made by Mr Sykes had "…not provided substantive reasons to refute the grounds for non-compliance action …". Mr Sykes was advised of his right of appeal against the decision to cancel and that the decision would not take effect until the expiration of the appeal period.
[43] AR 328 – 329.
[44] Ibid pp. 350 – 351.
Mr Sykes argued that it was not open to the respondents or the Court to go behind the contents of this correspondence. He contends that where the Minister identified and stated him to be the holder of the subject leases in November 2006 and March 2007 no argument could be made that he had, in fact, ceased to be the lessee after 26 April 2000.[45]
[45] Appeal transcript T. 17 – 21: Ground 4 (AR 499) and 11 (AR 519).
The learned Member rejected that argument.[46] He said:
[46] Reasons [73] – [82].
"During the term of the petroleum leases, the Petroleum Act provided the following definition of lessee:
'Lessee', means the holder of a petroleum lease.'
Clearly, in my view, if Mr Sykes has not substantially complied with the provisions of the Act and his leases, then: he is unable to satisfy the prerequisites for renewal of his leases; his leases cannot be renewed; and subsequent to 26 April 2000, he is no longer the holder of a petroleum lease and is therefore no longer a lessee as defined and referred to in the Act. As at 27 April 2000, the definition of holder referred to by Counsel for QGC and the Minister was not in existence, and accordingly there was no tie, in a statutory sense, of a holder by definition to the petroleum lease register. In short, the Minister had no power to cancel the leases as he purported to do by his letter of 30 March 2007 as Mr Sykes, subsequently to 26 April 2000, ceased to be the lessee of the petroleum leases and accordingly never could become a holder of a petroleum lease as defined in 2004."[47]
[47] Reasons [82].
[47] The correspondence cannot sensibly be read any other way than that as at 17 November 2006 and 30 March 2007 the Minister was under the mistaken belief that the appellant was then the holder of the subject leases. That conclusion is reinforced by correspondence by the Department's Senior Tenures Officer (South East Region) dated 12 March 2007[48] which referred to Mr Sykes as the "current 100% holder for PL 72 and 73." Error on the part of a Departmental officer will not restore that which has vanished. Neither could the Minister’s letters in some way reinstate the original leases or create a right of renewal or in some other way create some right of tenure. The Parliament has mandated how a lease may be renewed. This is but an example of the well known and long established principle expressed by Rich J in New South Wales v Bardolph:[49]
[48] AR 525.
[49] (1935) 52 CLR 455 at 496.
“When the administration of particular functions of Government is regulated by statute, and the regulation expressly or impliedly touches the power of contracting, all statutory conditions must be observed and the power no doubt is no wider than the statute contemplates…”
[48] That observation was expressly approved by the Privy Council in Cudgen Rutile (No 2) v Chalk.[50] Lord Wilberforce had said in Cudgen:
[50] [1975] AC 520 at 533.
“It follows as a logical consequence that when a statute, regulating the disposal of Crown lands, or of an interest in them, prescribes a mode of exercise of the statutory power, that mode must be followed and observed.” [51]
[51] At 533.
[49] In Australian Broadcasting Commission v Redmore Pty Ltd[52] Kirby P said:[53]
[52] (1987) 11 NSWLR 621.
[53] At 627.
“Their Lordships in [Cudgen] held that where a statute prescribed a mode for the exercise of statutory power in the disposal of interest of the Crown, the prescription had to be observed.”
[50] The appellant's assertion that the terms of the original leases had been extended to 26 April 2005 was no doubt, at least in part, based on the assumption that there were no problems associated with his renewal application of 24 December 1995 and his letter of 28 February 2000 satisfied the Minister. On 21 March 2006, more than six years after the first renewal application, the Department finally responded to that application and to the correspondence of August 2004 advising Mr Sykes that: [54]
[54] AR 723.
(i)there had been no renewal of the original leases;
(ii)the 1999 renewal application was still "subject to determination";
(iii)all of the renewal applications were being assessed "… pursuant to section 45 of the Petroleum Act 1923, as to whether they comply with the requirements for renewal.";
(iv)there were indications that the terms and conditions of the original leases had not been substantially complied with; and
(v)he had twenty days to provide written submissions showing how there had been substantial compliance and why the leases should be renewed.
[51] That letter is not entirely consistent with the later correspondence by the Minister. It is clear that the Department failed in its duty to treat the first renewal application in an appropriate and timely manner. The course of action finally adopted by the Minister would appear to have been the consequence of the Department obtaining legal advice and a recommendation that he "… send a notice to the holder inviting a submission … with regards to the non-compliance of the Act and terms and conditions of the (leases)…"[55]
[55] Internal memo dated 03/11/05; AR 721 – 722.
[52] As was recognised in the Department's internal memorandum of 3 November 2005, due to the substantial delays in processing the appellant's 1999 renewal application, that application had to be dealt with in accordance with the provisions of the Petroleum Act 1923 in its then current form.[56] The Act was amended in 2004, among other things, to introduce new tenure non-compliance procedures and activities[57] including the power to cancel a mining tenure because of non-compliance with the provisions of the Act and/or the terms and conditions of the tenure.[58]
[56] At 722.
[57] Petroleum Act 1923, Part 6P.
[58] s 80T(1)(c).
[53] The approach adopted by the Minister in the letters might have been appropriate in the event that PL72 and PL73 were still on foot in 2006. However the original leases had come to an end on 26 April 2000. Those tenures could only be validly renewed in circumstances where there had been, pursuant to s.45(1) of the Petroleum Act, substantial compliance with the legislation and the terms and conditions of the leases. The Minister had no power to override or waive the requirements imposed under s.45(1). Whether or not there is such substantial compliance and the right of renewal is largely a question of fact which cannot be avoided because of the words used by the Minister in correspondence.
[54] Mr Sykes has referred to the Constitution of Queensland 2001 insofar as it supports his argument that the separation of powers doctrine precludes, as we comprehend his contention, the courts from examining and derogating from what the Minister has asserted in his letters and what is on the Register. What has been said above is sufficient to dispose of this argument. It is a constitutional truism that the Westminster model of government which prevails in Queensland does not comprise a pure separation of powers system advocated by Montesquieu[59] and finding its best known example in the United States’ Constitution. As observed by Professor Ratnapala,[60] State Supreme Courts and the Privy Council have repeatedly declined to draw separation of powers implications from State Constitutions.[61]
[59] The Spirit of the Laws (L’Esprit des Lois) (1748)
[60] Suri Ratnapala, Australian Constitutional Law: Foundations and Theory, 2nd Ed Oxford (2007) at 115.
[61] Clyne v East [1967] SR (NSW) 285; Gilbertson Estate of South Australia [1978] AC 772.
[55] Although the Department has sought and received from Mr Sykes rent in respect of the leases since 26 April 2000 he does not express an argument based on an estoppel. If he had, the answer must be the same: that no public official can bind the State contrary to the provisions of a statute.
The Register
[56] Mr Sykes contends that by virtue of his name being, at all material times, noted on the tenure “register” as the “holder” of PL72 and PL73, he thereby retained title to the leases.[62] According to Mr Sykes the entry on the register “must be accepted as defining the holder of a title … ”.[63]
[62] Appeal transcript T30 L38-58.
[63] AR 519, Ground 10.
[57] Section 80A of the Petroleum Act1923 relevantly provides:
“Petroleum register
(1) The chief executive must keep a register of details about—
(a) 1923 Act petroleum tenures … .”
The Act also provides for public access to the register[64] and the correction of the register by the Chief Executive.[65]
[64] S80C.
[65] S80D.
[58] The learned Member concluded that the scheme and effect of the legislation provided for a system for registration of title rather than title by registration.[66] The details of PL72 and PL73 are recorded on documents described as “Queensland Department of Mines and Energy Miscellaneous Tenures Public Detail Report”.[67] The documents are materially identical for both leases. The public details reports relevantly note that the “status” of the leases is “GRANTED” and that the "sub-status” is “RENEWAL LODGED”. The date of the grant of the leases is recorded as 27 April 1995 but there is also an entry “DATE NON-CURRENT” - 26 April 2000. Under the heading “PRINCIPAL HOLDER” Mr Sykes’ name appears. Under the heading “HOLDER NAMES” Mr Sykes’ name also appears.
[66] Reasons [84].
[67] AR 523-524 (PL72) and 521-522 (PL73).
[59] Pursuant to s 2 of the Petroleum Act1923 a “holder” is defined as “…each person registered in the petroleum register as its holder.” No definition of the term “principal holder” is given. A lessee is defined to mean the holder of a petroleum lease.
[60] The scheme and effect of Part 6M of the Petroleum Act is to require the chief executive to record and keep a register of accurate information about tenures under the Act which is available to the public. The register of itself is not capable of creating a right of tenure as prescribed under the Act. There is no reasonable basis for concluding that the act of recording in the register, the name of Mr Sykes as the holder of the subject leases, guarantees title. Neither can it create any right to the renewal of the leases because s 45(1) of the Act requires substantial compliance with the Act and the terms and conditions of the lease.
[61] There are some similarities between ss 80A, 80B and 80C of the Petroleum Act 1923 and certain provisions of the Land Title Act 1994[68] but there are fundamental differences. Pursuant to s 37 of the Land Title Act indefeasible title for a Lot is created on the recording of the particulars of the Lot in the freehold land register. Interests in land less than freehold title, including leases,[69] may also be registered pursuant to that Act. The rights, benefits and privileges of indefeasible title are prescribed in s 184 of the Land Title Act. No such provisions are to be found in the Petroleum Act.
[68] For example s 27 – the duty to keep a register, s 28 and s 29 the requirement to record specific and accurate information, s 35 public access to the register.
[69] Part 6 LTA
[62] At a more practical level the arguments advanced by Mr Sykes on this topic fail to have any regard to entries in the register which strongly suggest that as at 26 April 2000 the subject leases were not current and were the subject of an application for renewal.
(b) Alleged errors of fact
[63] Mr Sykes has referred to numerous alleged errors of fact, failure to refer to material facts, unnecessary findings of fact, failure to make findings of fact and taking into account irrelevant considerations. An annexure to QGC’s submissions identifies 15 such alleged errors. Some which seem of most importance to Mr Sykes are discussed in these reasons. The others are not relevant and need not be analysed further. We can discern no error in the learned Member’s approach to those facts.
(c) Allegations of bias and denial of natural justice
[64] Mr Sykes asserts that the learned Member was biased against him and he was thereby denied a fair hearing.[70] The particulars of or alleged evidence of bias is wide ranging, scattered throughout the appeal record, and not all of it was referred to by Mr Sykes in his oral submissions. The following appear to be the instances of bias about which Mr Sykes expressed concern:
[70] Notice of Appeal – Ground 5: AR 502 – 509.
(i) The judgment itself reveals bias as it is "too good" for QGC and "too bad" for Mr Sykes on a consistent basis.[71]
[71] AR 862 – Ground 2.
(ii) The learned Member should not have referred to and/or was inappropriately influenced by comments[72] made by Keane JA in a recent decision of the Court of Appeal,[73] referring to Mr Sykes' "determination to persist with this distinctly Quixotic claim."[74]
[72] Reasons [5].
[73] Sykes v Queensland Gas Co. Ltd (2007) QCA 277.
[74] AR 502 – Ground 5(2).
(iii) The learned Member unfairly curtailed Mr Sykes' evidence.[75]
[75] Ibid, 503 – Ground 5 (4)(ii).
(iv) The learned Member failed to have sufficient regard to and/or detracted from the effort and work carried out by Mr Sykes.[76]
[76] Ibid, 504; also at 512 – Ground 5(4)(ii).
(v) The learned Member acted in an unbecoming manner towards Mr Sykes shortly before judgment was delivered. This incident involved the Member giving Mr Sykes a "wry smile or grimace" in the foyer of the Court.[77]
[77] AR 512 and 514 - 515 – Ground 7.
(vi) The learned Member was wrong to refer to or be "concerned in" the affidavit of a Ms Bozonji."[78]
[78] Ground of Appeal 12, AR 443.
(vii) The learned Member allowed, if not assisted, senior counsel for QGC to carry out a grossly unfair cross-examination of the appellant.[79]
[79] Ground of Appeal 5(o), AR 509: also AR 1036 - 1038.
[65] It seemed reasonably clear in the course of oral argument that it was the last of these matters that concerned Mr Sykes most. Further, the allegations made and articulated in his material and in oral argument make it clear that he contends grounds exist for finding not only that there was a reasonable apprehension of bias but there was actual bias.
[66]In Ebner & Ors v Official Trustee in Bankruptcy & Anor,[80] Gleeson CJ, McHugh, Gummow and Hayne JJ stated the test for determining whether a judge is disqualified from sitting because of the apprehension of bias in the following terms:
[80] (2001) 205 CLR 337 at 344, paras [6] to [8]: See also Johnson v Johnson (2000) 174 ALR 655 at paras [11] and [12].
"[6] Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle…"
“[7] … There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror.
[8] The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed."
(i)The “Too Good” “Too Bad” point
[67]That one party "wins" and another "loses" in commercial litigation is not at all uncommon. The findings of fact made by the learned Member were reasonably open on the evidence before him and there is no evidence sensibly evaluated, that the relevant rules of law, either common law or statute were applied in a biased way.
(ii) The quixotic claim point
[68]Another matter raised by Mr Sykes commences with a recognition by the learned Member that he appeared in person and culminated in quoting the following passage from the judgment of Keane JA in Sykes v Queensland Gas Co Ltd:[81]
[81] (2007) QCA 277 at [14]. [23], [25] quoted in Reasons at [5]).
“Mr Sykes appears on his own behalf. Allowance must be made for any difficulty which Mr Sykes may experience in doing himself justice as a result. The difficulty which confronts a person who represents himself in litigation is proverbial; but Mr Sykes is very articulate and presented his arguments in this Court with considerable confidence. Mr Sykes’ confidence in the righteousness of his cause was not, however, matched by an appreciation of the role of this Court as a court of appeal, or of the requirements of the UCPR or of the court’s obligation to act in an even-handed way between parties to litigation.
…
His Honour’s observation was plainly correct. In this Court, Mr Sykes was not able to explain how it is that he asserted that these observations were in error. This inability did not deflect Mr Sykes from his determination to persist with this distinctly Quixotic claim.
…
Once again, Mr Sykes fails to appreciate that considerations of fairness to the respondent required that, having regard to the history of the case, some provision should be made to protect the respondent from baseless vexation, and that the order which was made was made as a condition of the refusal of the respondent’s attempt summarily to terminate his second action.
…
While it is true to say, as Mr Sykes says, that how Mr Sykes goes about the funding of his action is a matter for him, the Court is entitled, and, indeed, obliged, to ensure that the litigation is conducted fairly to the respondent and not as an exercise in self-indulgence by a litigant who has shown a relaxed attitude to his obligation to adhere to the rules designed to ensure that litigation is conducted fairly to both sides.”
[69]It was unfortunate that the learned Member called in aid these observations from the Court of Appeal. In doing so the learned Member allowed his own independent appreciation of Mr Sykes’ case to appear unduly influenced by the opinion of the Court of Appeal about Mr Sykes’ prospects in a different case. In Galea v Galea[82] Kirby ACJ (as his Honour was) observed:
[82] (1990) 19 NSWLR 263 at 279.
"In judging the suggestion of a supervening apprehension of bias, it is reasonable to assume that the hypothetical lay observer would base the opinion on a fair assessment of the judge's conduct in the context of the whole of the trial. A judgment of the loss of impartiality and neutrality would not be made from a short and emotional exchange taken out of context and then weighed in isolation."
[70]The contents of paragraphs 3 and 4 and the introductory words of paragraph 5 of the reasons for judgment, make it clear that what was concerning the learned Member was that Mr Sykes was a self-represented litigant. The Member seemed to be concerned about the difficulties which confront such litigants and alerting Mr Sykes to a truth that might not have been evident to him, that a court is required to endeavour to do justice to all parties, something which Keane JA emphasised. When the offending passages are read in context there is nothing to suggest that they might have led the learned Member to bring other than an impartial mind to the case and decide it other than on its legal and factual merits or to have been impermissibly influenced by Keane JA’s comments.
(iii) Curtailing the evidence
[71]Mr Sykes contends that his evidence in chief was unfairly curtailed by the learned Member.[83] In this context he referred us to the transcript of the proceedings where the learned Member interrupted him by saying, “Well as you've heard, Mr Sykes, we are not going into a lengthy side of the evidence". That interruption needs to be seen in context. A reading of the transcript leading to that comment reveals that the parties and the Court were then primarily concerned with a number of procedural issues. These included identifying the issue or issues to be ventilated and decided; identifying what material the appellant intended to rely on and the best way of getting it before the Court; and, how the hearing was otherwise to proceed.[84]
[83] AR 503.
[84] AR 35, 42, 45-49, 65-69.
[72]Importantly, it appears that Mr Sykes fully understood that his evidence in chief was to be (subject to objection) that set out in the various affidavits filed by him.[85] It is likely that this is the reason that he raised no objection to the interruption at that stage of the proceedings. Immediately following the interruption, Mr Sykes called the other witnesses he intended to rely on, Mr McCormack and Mr Kozak. At the conclusion of Mr Kozak’s evidence he was asked if he had any more witnesses. He answered that he did not and was ready to be cross-examined and did not seek to put any further evidence before the Court "at this stage".[86]
[85] AR 65 L 25 - 30.
[86] AR 178 L. 1-25.
[73]It is clear that the learned Member was attempting to keep the parties on track procedurally. Nothing suggests that the learned Member sought deliberately to curtail Mr Sykes’ evidence either to disadvantage him or advantage the respondents. Before us Mr Sykes did not advance any argument as to why the evidence he was then giving was relevant to his case and/or how the interruption might have caused him any prejudice.
(iv) The past work of Mr Sykes
[74] This argument has two elements. First, that the learned Member failed to have regard to evidence of work carried out by Mr Sykes and/or detracted from that work. Second, that this was evidence of "… part of a derogatory position which is all pervading in Mr Smith's judgment".[87] Mr Sykes did not demonstrate that any remarks or omissions made by the learned Member about this evidence were derogatory of him or his efforts. That evidence was irrelevant to any aspect of the issue to be decided, and particularly, that he had substantially complied with the provisions of the leases or of the Petroleum Act.
[87] AR 504.
(v) The chance encounter
[75]The incident concerning the chance encounter between Mr Sykes and the learned Member in the foyer of the court precinct is of no significance. It occurred about half an hour prior to the Member handing down his decision and it is not surprising that he might have felt uncomfortable and, might look so, and thus produce what might be perceived to be a wry grin or grimace. Such behaviour could not sensibly be construed as evidence of bias or apprehended bias.
(vi) The affidavit of Ms Bozonji
[76]Mr Sykes complains that "The judge was concerned in the information leading to Ms C Bozonji's affidavit … and said he had notes on it."[88] This assertion is made in ground 12 of the notice of appeal filed by Mr Sykes against the ex tempore decision of the learned Member delivered on 19 December 2007[89] dismissing Mr Sykes’ application for summary judgment. It seems that Ms Bozonji’s affidavit was not concerned with the merits but was concerned with ensuring that documents then before the Supreme Court and Court of Appeal would be used in the Land Court proceedings. Mr Sykes did not raise any objection to the Member continuing with the case when Ms Bozonji's affidavit was being discussed and after hearing counsel’s explanation about the reasons for the affidavit, Mr Sykes agreed to Ms Bozonji being excused.[90]
[88] AR 443.
[89] AR 435 – 440.
[90] AR 43 L. 20 to AR 44 L. 10.
[77]Mr Sykes did not make clear how the alleged inter-relationship between the Member and the affidavit evidences any bias. On the material before us, we have been unable to find any such link.
(vii) The cross-examination point
[78]The cross-examination of Mr Sykes by senior counsel for QGC concerning the contents of an application to deregister the company XLX NL[91] and the related warning concerning self-incrimination dominated the oral submissions made by Mr Sykes. The following relevant exchanges occurred concerning the company return: [92]
[91] AR 296 - 297.
[92] AR 201 - 202.
“It contains, in the middle of the page, a declaration by you because it’s an application to deregister XLX NL as being a defunct company?-Yes.
And in that declaration, you tick the box that it has no assets?-Well, that’s true. It has no nett assets at all.
Not so – it doesn’t say that. It says it has no assets because there’s another box, you see. It has assets as set out in the attached schedule. You don’t tick that box?-No.
And that was false, wasn’t it?-Have a look at the dates – 10 May-----
You signed it. It’ll help you with this. It’s – you sign it on 9 May, it seems?-Yes.
And the transfer we’ve just looked at was signed by the transferor on 17 May and signed by you as transferee on 6 June. Yet you sign this declaration-----?-Yes?
-----that it had no assets?-And when did I send the – 14 – okay – when did I sign the Queensland stamp duty thing? On 17 July. And I signed the thing on 6 of thing.
Mr Smith, I am now going to ask a couple of questions of Mr Sykes about him signing this document knowing it to be false, and it might be appropriate that he be warned he has no obligation to answer that question?-But I did – I say that it had no nett assets. Assets as set out in the schedule. Just a minute. Yes.
Mr Sykes, I’m going to ask you now a question and I’m going to ask you some questions later on about documents that you’ve signed, which I’m going to ask you whether you signed knowing them to be false. You don’t have to answer those questions because they’re questions that might lead you to incur a penalty and you have every right not to answer the questions. But I’m going to ask you them, anyway. Is that clear?-Yes.
MR SMITH: Well, Mr Sykes, I want to make sure that it’s clear to you as well. Explain to me what Mr McKenna just said to you, in your own words.
MR SYKES: He’s warned me that the document here may be false and if – depending on my answers, which I may or may not give – it may incur some penalty to myself, depending on the answers but I’ll still try and answer them the best I can.
MR SMITH: You may incriminate yourself by answering questions.
MR SYKES: I might, yes.
MR SMITH: Yes, I’m satisfied that Mr Sykes understands.
MR McKENNA: Thank you. Thank you, Mr Smith.
WITNESS: By the way – by the way, I’ve just noted something. You put a question to me that I signed a declaration that at the date of this application, the company had no assets?
BY MR McKENNA: Yes?-Now that question was incorrect. I’ve clearly put the word ‘nett’ after that. Now that’s most important. See that little ‘nett’? In other words, what I signed is perfectly right but you put the wrong question to me and I----
I’m sorry-----?-- ----for a moment, was terrified.
-----are you saying that-----? See, that is the word ‘nett’. I can recognise my own writing. I swore – I made a declaration on that day by (c), that at the date of this application, 10 May ’95 or thereabouts – or 9 May, beg your pardon, is the date I signed it, I think, yes – that at the date of this application, the company – that’s XLX – had no assets nett. And that is a perfectly truthful statement-----
Well, I will suggest to you, Mr-----?-- -----which I stand by.
I will suggest to you, Mr Sykes, that that’s in fact crossed out. Whatever that word is-----?-No, it’s ‘nett’.
-----it’s crossed out?-I can read my own writing, scribble though it is and that word is ‘nett’.
Well-----?-It had no schedule of assets attached, and the word is ‘nett’.
Whether it’s ‘nett’ or not, can I suggest to you that at the time you sought to deregister this company, in fact, you knew the tax office was pursuing for a debt?-Well, I can’t remember now but I do remember that in the end the government asked us to keep the company alive an extra period, which was unspecified. The board met and we decided to hand all the assets, including the company seal, over to – to the tax office.
All the assets except one – the petroleum leases?-No. that was much later.
All the – here you are, seeking de-register of a defunct company, swearing that is has whatever it is you’re swearing it at – it has nothing on it – and may I suggest the only reason you were doing this is to seek to defeat the claim of the tax office?-Of course not. My aim was to wind up all my companies, which I did – every single one of them disappeared, except for two and they were ones that I bought off third parties. One, I sold to somebody else and that was called Opal Supplies, which ….. ”
[79]There are three elements to the complaints made about this passage. First, the questions asked by counsel are said to be dishonest and designed to entrap Mr Sykes impermissibly. Second, that by becoming involved in the warning against self-incrimination the learned Member had shown his bias against Mr Sykes. And, finally, the bias was further evidenced by the learned Member’s failure to censure counsel for this part of his cross-examination. This matter was also raised by Mr Sykes in his earlier application for summary judgment.
[80]Counsel was seeking to discredit Mr Sykes by showing that he had falsely completed the application by concealing assets, namely, potentially valuable mining tenures. The form refers to assets in two places. Under the heading “Declaration” on page one the company officer has the option of ticking either the box declaring that, at the date of the application, the company has no assets or ticking the box that the company has assets as set out in the attached schedule.[93] On page 2 of the application form appears a box in which a draft “Notice of intention to deregister a company” is to be set out. The company officer can declare, as a replication of the page 1 declaration in sub-paragraph (c), that the company has no assets or that it has assets as set out in the attached schedule.[94] The “has assets” option has been crossed out and in hand writing “net” is inserted between “no” and “assets” above the line. This writing on page 2 was not raised in cross-examination either by counsel or Mr Sykes.
[93] AR 296.
[94] AR 297.
[81]Counsel’s cross-examination proceeded on the basis that Mr Sykes had deliberately and falsely ticked, under the heading "Declaration" on page 1 on the box marked “has no assets”. Mr Sykes complains that this was a dishonest attempt to trap him as he had added the word “net” after the phrase “has no assets” before he ticked that particular box. Mr Sykes maintains that he carried out the same exercise in sub-paragraph (c) at page 2 of the return by again adding the word “net” to the response that the company had no assets. That is, what he had declared was that the company had no net assets, not that it had no assets at all.
[82]A perusal of the document shows what could only be described as some scribble or squiggle, following the words “… has no assets” after the box ticked by Mr Sykes on page 1. It is not obvious that this marking represents the word “net”. It is no criticism of counsel that he failed to appreciate the significance of the marking. Mr Sykes did not immediately identify it. The question did not range outside what was permissible.
[83]As to the warning against self-incrimination, Mr Sykes on more than one occasion, stated that he had no complaint about being warned. His complaint was that the Member should not, after asking if he understood the warning given by counsel, have added the words “you may incriminate yourself by answering questions”. This addition amounted, in Mr Sykes perception, to a threat and evidenced bias against him.[95] The risk his answers might lead to sanctions was pointed out by counsel. It is the obligation of a judge or other person hearing and determining a matter to be assured that a witness fully understands the content and effect of such a warning and is the person who administers it. On any sensible reading of the intervention by the learned Member, that was what he was doing.[96]
[95] Appeal transcript T6 L10-20; T8 L30-60; T11 L19-28.
[96] AR 201 L 23 - L 44.
[84]Finally, Mr Sykes contends that the hearing miscarried because the Member failed to censure counsel’s cross-examination about the company form. For the reasons given above there was no basis for censure. In the circumstances it was not inappropriate for counsel to ask that the Member put on the record his views as to the appropriateness of the cross-examination. Mr Sykes complained that the cross-examination was improper and inferred that he was a criminal and/or was paranoid.[97] Often a perusal of the transcript below will inform an appellate court if cross-examination was improper. On occasions the true flavour of the trial not captured by the mere transcription of the words. Where complaint is made, particular if the part is self-represented, counsel may seek a ruling that the cross-examination was conducted fairly. That was the case here.[98]
[97] AR 234 L 38 – 45.
[98] AR 256 and 272,.
Conclusions on bias
[85]We are satisfied that Mr Sykes has not established a reasonable apprehension of bias or actual bias. He has not been able to show or articulate the logical connection between the matters relied on as evidencing bias and the deviation (actual or feared) from deciding the case on its merits. To put it another way, when the facts relied are applied to the circumstances of this case, they do not provide any evidence of actual bias or of a reasonable apprehension that the Member was diverted from his duty to hear and determine the case according to law and without fear or favour, affection or ill will.[99] There are numerous examples throughout the transcript of hearing where the learned Member granted latitude to Mr Sykes, and was concerned that he fully understood the procedure.[100]
[99] Dovade Pty Ltd & Ors v Westpac Banking Group & Anor (1999) NSWCA 113 at para 110.
[100] An example can be seen on 26 November 2007, at AR 35.
Concluding observations
[86] We accept that Mr Sykes has a genuine belief that he should still have tenure in the two petroleum leases and that these proceedings are not vexatious. Having spent a great deal of time and money in petroleum exploration and in proving the gas and oil reserves in the area, Mr Sykes believes that he has a moral entitlement, regardless of the legal position. At the time of drilling the two production wells on the ATP, the price of oil and gas and the lack of infrastructure in the area, made the exploitation of the resources uneconomic. However, Mr Sykes recognised that the economic climate would change, but not in the short term. Therefore, when applying for the petroleum leases, in correspondence with the Department on behalf of XLX on 24 September 1993, Mr Sykes applied for 21 year production licences, which he explained in this way:
“It is not expected production will recommence until oil rises in price and Brisbane becomes more short of gas due to the depletion of Roma area fields.”[101]
[101] AR 544-545.
When offered leases for a five year term, in a letter dated 13 June 1994, Mr Sykes again advised the Department:
“… it is not probable that gas production will commence in a five year period starting from 1st June 1994 because Queensland already has enough ‘attached to pipeline’ gas available to it for this period.”[102]
[102] AR 583.
In his reply on 28 June 1994, Mr Kozak of the Department advised Mr Sykes:
“After due consideration of the point raised in your above reference letter, viz. the improbability of gas production commencing prior to 1 June 1999, I wish to confirm the original offer made by the Department, i.e. the petroleum leases over Xyloleum Gasfield as well as the XYL-X Oilfield are to be for a period of five (5) years with right for renewal after that period if substantial compliance with conditions of the lease and the Petroleum Act 1923 has occurred in that time.”[103]
[103] AR 550.
[87] On 11 January 1995, Mr Sykes accepted the five year term for each lease, but with a qualification indicating that he was not abandoning his original application for a 21 year term. The evidence in this case indicates that Mr Sykes has consistently acted as if there would be automatic right of renewal. By letters dated 25 February 2000, Mr Sykes responded to the Department’s letter dated 17 February 2000 requiring that he indicate how he had complied with the statutory provisions for renewal. He advised, among other things, that his expenditure during the five year term for PL72 was $38,000 for marketing reviews, lease inspections and geological assessments by himself and for annual lease inspection and a well valve test by Mr Haydn Mitchell.[104] He also explained that his expenditure during the five year term of PL73 was $15,000 for inspections and work by Mr Mitchell and himself.[105]
[104] AR 559-563.
[105] AR 564 -567
[88] The leases were not renewed, but Mr Sykes was not so advised and continued to pay the rent which the Department retained. He thus assumed, with some justification, that his explanation had been accepted. He was not advised it was not. It is therefore not surprising that Mr Sykes is suspicious of the bona fides of the respondents now that the price of gas and oil have improved the economic prospects of the two fields, and QGC is now producing successfully nearby. It was not until relatively recently that Mr Sykes was advised that his petroleum leases were not automatically renewed on 26 April 2000 and would be cancelled. His frustration is evident from his attempt to rely on s 7 of the Land Court Act in his oral submissions:
“It’s to be a court of equity and to judge on the substantial merits of the case. And I, of course, having spent $16,000,000 of my own money in the Surat Basin, think it’s very unjust that I get turfed out of my little tiny leases I’ve got, with nothing at all.”[106]
[106] Appeal transcript 29-30.
Mr Sykes’ indignation was no doubt intensified by the unexplained inaction of the Department for such a long period after his application to renew the petroleum leases.
[89] However, those leases could only be renewed if Mr Sykes complied with the statutory preconditions or, alternatively, sought exemption from them. For the reasons given above, we find that he did neither of those things. We agree with the conclusion of the learned Member that the leases expired on 26 April 2000.
Order
Appeals numbered LAC 2007/0859 and LAC 2008/0024 are dismissed.
WHITE J
JJ TRICKETT
RJ JONES
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