Explorers Beware: Your Tenure May Now Be At Risk

This week, Warden Cleary delivered her decision in True Fella Pty Ltd v Pantoro South Pty Ltd [2022] WAMW 19. In True Fella, the Warden found that True Fella’s application for an exploration licence (E63/2149) was invalid on the basis the application was accompanied by a non-compliant section 58(1)(b) statement.

Introduction

The High Court’s decision in Forrest & Forrest Pty Ltd v Wilson (2017) 262 CLR 510 (Forrest) was controversial when it was delivered given the impact it was likely to, and did, have on mining leases which had erroneously been granted to tenement holders. That decision, however, was based on sound legal principles which had developed over time in relation to the alienation of the State’s rights to minerals. The decision was also made having regard to the language in section 74(1)(ca)(ii) of the Mining Act 1978 (WA). Forrest has been applied favourably in various subsequent decisions of the Mining Warden, by the Supreme Court (see for example Forrest & Forrest Pty Ltd v O’Sullivan [2020] WASC 468) and the High Court itself (see Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2021) 95 ALJR 128). The author recently published an article in the Australian Resources and Energy Law Journal regarding the Supreme Court’s decision in Golden Pig Enterprises Pty Ltd v O’Sullivan [2021] WASC 396 (Golden Pig),[1] in which it was suggested that tenement holders should pay serious attention to the requirements of the Mining Act when applying for tenements, including exploration licences. Notably, any failure to strictly comply with the requirements of the Mining Act’s regime during the application process would likely lead to a tenement being declared invalid or a ‘legal nullity’.

This week, Warden Cleary delivered her decision in True Fella Pty Ltd v Pantoro South Pty Ltd [2022] WAMW 19 (True Fella). In True Fella, the Warden found that True Fella’s application for an exploration licence (E63/2149) was invalid on the basis the application was accompanied by a non-compliant section 58(1)(b) statement. Arguably, this finding itself is not controversial (although the possible effect of section 59(6) should not be ignored). More controversial, however, is the basis on which the Warden found the section 58(1)(b) statement was non-compliant.

Jurisdiction v Recommendation

There are various competing provisions under the Mining Act which are relevant to the recommendation of the grant of an exploration licence. Two of these are the:

• Warden’s obligation not to “recommend the grant of an exploration licence… unless he [or she] is satisfied that the applicant is able to effectively explore the land in respect of which the application has been made”, set out in section 57(3) of the Mining Act; and
• requirements of the application itself, set out in section 58(1) of the Mining Act.

The provisions establish issues which are distinct from each other. The latter determining whether the applicant has enlivened the Warden or Mining Registrar’s (as the case may be) jurisdiction to hear the application while the former determines whether the exploration licence should or should not be recommended for grant.   

In beginning her analysis of the pre-conditions to an exploration licence’s grant, the Warden noted the distinction between these two matters, noting they were “two separate considerations”[2] and “[o]nce compliance has been determined in the affirmative, only then is and can the second question [as to recommendation for grant] be engaged”.[3] The Warden then considers these issues with reference to recent case law regarding the Mining Act’s regime.[4]

The Warden faces difficulty in her determination of “what is required for the content of the statement to comply with s 58(1)(b)”. The Warden seeks to rely on his Honour Justice Allanson’s decision in Golden Pig to determine those requirements, noting his Honour’s view that “the mining registrar or other person reading the application and accompanying statement should be informed, by those documents, what resources are available to the applicant to carry out the proposed method of exploration and the proposed program of works, and to fund the estimated expenditure.”[5] This statement is based on the language articulated in section 58(1) of the Mining Act.

Unfortunately, the Warden then states that “if there is sufficient material in the statement for the warden then to make a determination pursuant to section 57(3), the application will be compliant.”[6] Respectfully, this statement is not founded in the language articulated in section 58(1) of the Mining Act and is inconsistent with the Warden’s earlier, more accurate assessment that sections 57(3) and 58(1) are “two separate considerations”.[7] The conflation of the two distinct considerations is later described by the Warden herself as an “error”,[8] although this respectfully appears to have occurred.

Requirements for statement in support of exploration licence application

Of most concern for tenement holders and tenement applicants, however, is the manner in which this analysis was then applied and the level of detail which the Warden determined tenement applicants must provide in order for an application to be compliant (enlivening jurisdiction for recommendation). The Warden determined that an applicant is required to, for the purposes of section 58(1)(b), provide a description of the applicant’s plan and planned expenditure for the life of the licence, not just the first year, and the full area of the licence. The Warden went as far as to suggest an applicant should identify a target mineral, or minerals, to assist the decision maker to make a determination under section 57(3). This requirement is a product of the objector’s submissions which, respectfully, do not appear to be based on any legislative provision.[9]

The Warden held that without sufficient information about the applicant’s intentions and resources available to it over the life of the licence, an assessment under section 57(3) will not be possible. The decision purports to apply the principles canvassed in Forrest and Golden Pig. Respectfully, the Warden has instead (whether intentionally or not) conflated the requirement to strictly comply with the Mining Act under section 58(1) with the Warden’s factual discretion under section 57(3). The effect of this conflation is to impose requirements on applicants which are not otherwise expressed in the language contained in section 58(1). In order to demonstrate compliance, the language of the Mining Act (on its proper construction) does not require an applicant to provide the same level of detail in its application documents as would be required to meet the threshold in section 57(3) that the application should be recommended for grant. There are mechanisms in the Mining Act which enable the Warden to request an applicant to “furnish such further information in relation to [its] application, or such evidence in support thereof, as the mining registrar or warden may require…”.[10]

These matters are distinct from those considered in Golden Pig, where the applicant purported to provide the information required by section 58(1) but did not do so to the necessary level of detail.

The effect of True Fella

It is worth noting that subsequent Wardens are not bound by the decision in True Fella. It is, however, unlikely that True Fella will be judicially reviewed as it appears, on the balance of the facts, the Warden’s decision may ultimately be correct (because the supporting documents may not have contained the necessary level of detail in respect of those matters properly required under section 58(1) of the Mining Act, as was the case in Golden Pig).

It is the Warden’s determination that a failure to include a description of the works which will be undertaken during the entire duration of the tenement’s life (and across the full tenement area), including in respect of specific minerals, will amount to a non-compliant section 58(1) statement, rendering the application invalid and therefore failing to enliven the Warden’s jurisdiction to recommend or refuse the tenement’s grant. As has been reported, the ultimate effect of this may be to risk existing tenure of other tenement holders which has already been granted, but which was granted on the basis of documents lodged in support which did not contain the level of detail which Warden Cleary now purports to require.

The Minister for Mines, Bill Johnston, has today advised that the Department of Mines, Industry Regulation and Safety is examining the decision.

If you are affected by the decision in True Fella, or are not sure how True Fella may affect your existing tenure or current tenement applications, please do not hesitate to contact Mihali Palassis.