Agricultural Equity Investments Pty Limited v The Hon Chris Hatcher MP, Minister for Resources and Energy, Special Minister

Land and Environment Court (NSW)|2015-02-20|Before: Pepper J, Mr J

Agricultural Equity and Gold and Copper Resources Challenge Exemption

By amended summons filed on 30 October 2013, the applicants in these judicial review proceedings, Agricultural Equity Investments Pty Limited (the first applicant, or "AEI") and Gold & Copper Resources Pty Limited (the second applicant, or "GCR"), challenge the validity of an exemption order granted on 14 May 2013 ("the exemption order"), by the Minister for Resources and Energy ("the Minister").
The order was published in the New South Wales Government Gazette No 60 on 17 May 2013.
The order purports to grant an exemption to Big Island Mining Pty Ltd (the second respondent, or "Big Island") and Westlime Pty Limited (the third respondent, or "Westlime") from the operation of s 6 of the Mining Act 1992 ("the Act").
Big Island Mining did not participate in, although remains a party to, the proceedings.
The effect of the order is to permit the operation of a processing plant for "mining purposes" under the Act on land at London Road, Parkes ("the land"), which is known as the 'London-Victoria Mine', and which is owned by Westlime.
The applicants contend that the grant of the exemption order is invalid because it was made beyond power, was made for an improper purpose, and was made in circumstances where they were denied the opportunity of being heard prior to it being granted.
In my opinion, none of these contentions can be accepted and the amended summons should be dismissed with costs.

The Making of the Exemption Order

The following facts were uncontentious. The land comprises a number of lots, of which Westlime is the registered proprietor. The land formerly operated as an open cut gold mine. Presently, there is no current mining lease to conduct mining on the land because the mining lease granted in 1988 was cancelled by the Minister for Primary Industries on 27 June 2005, upon satisfaction that the land had been rehabilitated after the cessation of mining. Since 2001, Westlime has used the land for the processing of limestone for agricultural products and for hard rock base products.
On 7 August 2012, Parkes Shire Council ("the council") granted approval to an application by Westlime to modify a 1988 development consent for an open cut gold mine under s 96 of the Environmental Planning and Assessment Act 1979 ("the EPAA"), to permit the processing of iron ore transported from other locations (this modification is currently the subject of a challenge in separate Class 4 proceedings before the Court).
AEI is the holder of exploration licence No 7242 ("EL7242") for Group 1 minerals as defined under the Act in relation to the land. Meanwhile, GCR has a pending exploration licence application No 4916 ("ELA4916") for Group 1 minerals with respect to the land.
Big Island proposes to process the ore recovered from the Dargues Reef Gold Mine ("Dargues Reef") at the processing plant on the land. However, neither Big Island nor Westlime have a mining lease that permits the processing of ore on the land. Dargues Reef is located near Braidwood approximately 370 kms from the land. That mine is subject to a mining lease.
A briefing note to the Minister drafted in April 2013 (reproduced below) recommended that the Minister issue the order exempting Big Island and Westlime from the requirement of a mining purpose lease (emphasis added): Office of the Hon Chris Hartcher MP Minister for Resources and Energy, Special Minister of State and Minister for the Central Coast Briefing for Minister Ministerial Order exempting the operators of the mineral processing plant located on London Road, near Parkes from the provisions of section 6 of the Mining Act 1992. PURPOSE: To issue a Ministerial Order exempting the operators of the mineral processing plant located on London road near Parkes from the requirement to hold a mining lease for mining purposes under the provisions of section 6 of Mining Act 1992 (the Act). BACKGROUND: Under section 6 of the Act, a person must not carry out mining purpose which has been specified for the purpose of that section, except in accordance with an authorisation. Section 63(5) of the Mining Act 1992 prevents a mining lease for mining purposes being granted unless the decision-maker is satisfied that the mining purposes will be carried out "in connection with and in the immediate vicinity" of a mining lease for minerals. Big Island Mining Pty Ltd (BIM) holds ML 1675, over the Dargues Reef Mine which is located southeast of Queanbeyan. BIM proposes to process the ore recovered from ML 1675 at the Old London Victoria Mine plant near Parkes, which is about 370km from ML 1675. There will be some mining purposes as specified for the purposes of section 6 of the Act associated with the processing plant. Given that geographical distance between ML1675 and the site of the proposed processing plant, it is not considered possible to grant a mining lease for mining purposes due to the operation of section 63(5). Westlime Pty Limited (Westlime) process agricultural lime at the site and the ore for their operation is sources from a site approximately 20km away. Section 63(5) may also prevent Westlime from complying with the provisions of Section 6 (however, the Savings and Transition provisions of the Act give until the 15 Nov 2015 for them to have a mining lease to cover any of the purposes within their operation). The owner of the land and the processing plant, Westlime, obtained a modification to their planning approval, to allow the processing of the ore from Dargues Reef, from Parkes Shire Council on 7 August 2012. The modified approval is being contested in the NSW Land and Environment Court (Proceedings Number 41125 of 2012) by Agricultural Equity Investments Pty Limited, the holder of the exploration licence over the plant site. The use of this processing plant is essential for BIM's overall operations under ML 1675 within the Dargues Reef gold project. If BIM cannot use this plant it may jeopardise the financing of the Dargues Reef Project, and ultimately may result in the loss of NSW to an excellent gold project associated employment in the Braidwood area and may also contribute to a general loss of confidence in the NSW mining sector. Under clause 11 of the Mining Regulation 2010 "The Minister may, by order published in the Gazette, exempt any person or class of person from the operation of section 6 of the Act with respect to the carrying out of a particular mining purpose or class of mining purposes, that it is specified for the purpose of that section". The Minister's authority in relation to clause 11 of the Mining Regulation 2010 is delegated to the Executive Director, Mineral Resources. An order has been prepared to exempt both operators of the mineral processing plant on the "Old London Victoria Mine Site" from the requirement of section 6 of the Act. This relates to the construction maintenance or use of any reservoir, dam (including a tailings dam), drain or water race other than any reservoir dam, drain or water race principally issued for purposes not connected within mining or any other activities regulated by or under an authorisation, or The removal, stockpiling or depositing of overburden, ore or tailings to the extent that it is associated with the mineral extraction or mine beneficiation. On Lot 368 DP 750179, Lot 719 DP 727007, Lot 4 DP 830998 and Lot 1 DP 1069893. All these parcels of land are owned or under the control of Westlime. COMMENT The granting of this order will allow the BIM and Westlime projects to continue without the grant of a mining lease for purposes as is required under the provisions of section 6 of the Act. This situation has occurred due to an unintentional outcome of previous amendments to the Act with section 63(5) being an obstacle to the granting of an authority under the Act. Steps to amend the legislation have commenced.
Subsequently, on 14 May 2013 the then Minister, the Hon Chris Hartcher MP, issued an exemption order in the following terms: Mining Act 1992 ORDER I, the Minister for Resources and Energy, under clause 11 of Mining Regulation 2010, exempt the persons in column 1 of Schedule 1 below from the operation of section 6 of the Mining Act 1992 with respect to the carrying out of the particular mining purposes specified in column 2 of Schedule 1 below at the location specified in column 3 of Schedule 1 below. CHRIS HARTCHER, M.P. Minister for Resources and Energy Dated: …..[signature] …..2013 [14.5.2013] SCHEDULE 1 Column 1 Column 2 Column 3 Big Island Mining Pty Ltd Lot 368 DP 750179 (CAN 112 787 470) • Construction, maintenance or use of any reservoir, dam (including a tailings dam), drain or water race, other than any reservoir, dam, drain or water race principally used for purposes not connected with mining or any other activities regulated by or under an authorisation Lot 719 DP 727007 And • The removal, stockpiling or depositing of overburden, ore or tailings to the extent that it is associated with mineral extraction or mine beneficiation Lot 4 DP 830998 Westlime Pty Limited Lot 1 DP 1069896 (ABN 14 090 152 828)

Activities exempted from the requirement to have a mining lease by the order were listed in Column 2, and were, in summary, the construction and use of a new tailings storage facility and the removal, stockpiling or depositing of tailings. These activities form part of Big Island's proposal to process gold concentrate on the land from the ore mined at Dargues Reef.
The land that is described in Column 3 over which the exemption has been granted is land that falls wholly within EL7242 held by AEI.
In his statement of reasons dated 4 December 2013, the Minister outlined his reasons for the making of the exemption order: (a) Findings on material questions of fact … 7. Agricultural Equity Investments Pty Ltd ("Agricultural Equity"), a subsidiary of Gold and Copper Resources Pty Limited ("Gold & Copper"), has raised an objection to Cortona's proposed use of the site. Agricultural Equity holds an Exploration Licence over the site and has challenged the validity of the approval granted to Cortona by Parkes Shire Council. The challenge is currently before the Supreme Court. … (d) Reasoning processes leading to the decision Given the geographical distance between ML 1675 and the Site, it is not considered possible to grant a mining lease for mining purposes at the Site due to the operation of s. 63(5) of the Act. If BIM cannot use the processing plant at the Site, it may jeopardise the financing of the Project, resulting in a loss to NSW of an excellent gold project and associated employment in the Braidwood area and contribute to a general loss of confidence in the NSW mining sector. The granting of an order to exempt BIM and Westlime from the requirements of s. 6(3) [sic] (a) and (c) of the Act on the Site will allow their projects to continue without the grant of a mining lease for mining purposes.
Neither AEI nor GCR have consented to the grant of a mining lease to Westlime and Big Island.
According to the unchallenged evidence contained in an affidavit sworn by Mr Brian Locke on 27 March 2014, the sole director of AEI, AEI was not notified by the Minister that he was considering issuing the exemption order, and at no time was he "made aware by any other party" that the Minister was intending to grant the exemption. The Minister similarly accepts that he did not notify GCR that he was contemplating issuing the exemption order.

Legislative Framework Governing the Granting of the Order

The objects of the Act are set out in s 3A as follows (emphasis added): 3A Objects The objects of this Act are to encourage and facilitate the discovery and development of mineral resources in New South Wales, having regard to the need to encourage ecologically sustainable development, and in particular: (a) to recognise and foster the significant social and economic benefits to New South Wales that result from the efficient development of mineral resources, and (b) to provide an integrated framework for the effective regulation of authorisations for prospecting and mining operations, and (c) to provide a framework for compensation to landholders for loss or damage resulting from such operations, and (d) to ensure an appropriate return to the State from mineral resources, and (e) to require the payment of security to provide for the rehabilitation of mine sites, and (f) to ensure effective rehabilitation of disturbed land and water, and (g) to ensure mineral resources are identified and developed in ways that minimise impacts on the environment.
Section 6 of the Act is directed to the unauthorised carrying out a mining purpose. Section 6(1) creates an offence in these terms: 6 Unauthorised carrying out of mining purposes (1) A person must not carry out a mining purpose specified for the purposes of this section except in accordance with an authorisation that is in force in respect of the land where the purpose is carried out.
Section 6(2) of the Act empowers the Minister to regulate for an exemption to s 6(1): (2) The regulations may provide for the exemption, by order of the Minister, of a person or class of persons from the operation of this section with respect to the carrying out of a particular mining purpose, or a class of mining purposes, that is specified for the purposes of this section.
Clause 11 of the Mining Regulation 2010 ("the Regulations") empowers the Minister pursuant to s 6(2) of the Act to grant an exemption by order of the operation of s 6 in the following circumstances: Exemption from unauthorised carrying out of mining purposes in section 6 The Minister may, by order published in the Gazette, exempt any person or class of persons from the operation of section 6 of the Act with respect to the carrying out of a particular mining purpose, or a class of mining purposes, that is specified for the purposes of that section.
The "mining purposes" specified for the purpose of s 6 are stated to be in s 6(3) of the Act as: (3) The mining purposes specified for the purposes of this section are the following mining related purposes: (a) the construction, maintenance or use of any reservoir, dam (including a tailings dam), drain or water race, other than any reservoir, dam, drain or water race principally used for purposes not connected with mining or any other activities regulated by or under an authorisation, (b) opal puddling, (c) the removal, stockpiling or depositing of overburden, ore or tailings to the extent that it is associated with mineral extraction or mine beneficiation.
The term "mining purpose" is defined in the Dictionary to the Act in Sch 7 to mean "any purpose prescribed by the regulations as a mining purpose for the purposes of this definition".
Clause 7 of the Regulations prescribes the following purposes as "mining purposes" in respect of the definition of that term in the Dictionary to the Act referred to above: 7 Meaning of "mining purpose" The following purposes are prescribed as mining purposes for the purposes of the definition of mining purpose in the Dictionary to the Act: (a) the construction, maintenance or use (in or in connection with mining operations) of any one or more of the following: (i) any building or mining plant, (ii) any road, railway, tramway, bridge or jetty, (iii) any reservoir, dam, drain or water race, (iv) any cable, conveyor, pipeline, telephone line or signalling system, (v) any bin, magazine or fuel chute, (vi) any plant nursery, (b) opal puddling, (c) the removal, stockpiling, management or depositing of overburden, ore or tailings to the extent that it is associated with mineral extraction or mineral beneficiation, (d) the storage of fuel, machinery, timber or equipment for use in or in connection with mining operations, (e) the generation and transmission of electricity for use in or in connection with mining operations, (f) the construction, maintenance and use (in or in connection with mining operations) of any drillhole or shaft for: (i) drainage of gas, or (ii) drainage or conveyance of water, or (iii) ventilation, or (iv) conveyance of electricity, or (v) conveyance of materials, or (vi) communications, or (vii) emergency access to underground workings.
The term "mine" when used not as a noun, but as a verb means (see the Dictionary to the Act): (b) when used as a verb - to extract material from land for the purpose of recovering minerals from the material so extracted or to rehabilitate land (other than a derelict mine site) from which material has been extracted, but does not include any activity declared not to be mining by a regulation under section 11A or by an order made under such a regulation.
A "mining lease" is defined in the Dictionary to the Act to mean "a mining lease granted under Part 5, and includes a consolidated mining lease".
Anyone can apply for a mining lease (s 51(1) of the Act). The application must "specify the mineral or minerals, or the mining purpose or mining purposes, in respect of which the application is made" (s 51(4)(a), emphasis added).
Section 58(1) of the Act proscribes when a mining lease may not be granted over land. In particular, a mining lease may not be granted over land that is already the subject of an exploration licence or an application for an exploration licence for the same mineral "otherwise than to or with" the written consent of that licence holder or applicant. It states: 58 Land subject to authority (1) A mining lease may not be granted over any land: (a) the subject of an exploration licence that includes any mineral or minerals in respect of which the mining lease is sought, or (b) the subject of an assessment lease, mining lease or mineral claim, or (c) the subject of an application for any of the following that was lodged before the application for the firstmentioned mining lease: (i) an exploration licence that includes minerals in respect of which the mining lease is sought, (ii) an assessment lease, (iii) a mining lease, (iv) a mineral claim, otherwise than to or with the written consent of the holder of, or the applicant for, that licence, lease or claim.
The power of a decision-maker - in this instance the Minister - to grant a mining lease is circumscribed by s 63(5) of the Act: 63 Power of decision-maker in relation to applications (5) A mining lease may not be granted, in respect of a mining purpose or mining purposes only, unless the decision-maker is satisfied that the mining purpose or mining purposes is or are to be carried out in connection with and in the immediate vicinity of: (a) a mining lease in respect of a mineral or minerals, or (b) a mineral claim, being a mining lease or mineral claim that has been or is proposed to be granted.
Finally, under a mining lease the following rights exist (s 73(1) and (1A)): 73 Rights under mining lease (1) The holder of a mining lease granted in respect of a mineral or minerals may, in accordance with the conditions of the lease: (a) prospect on the land specified in the lease for, and mine on that land, the mineral or minerals so specified, and (b) carry out on that land such primary treatment operations (such as crushing, sizing, grading, washing and leaching) as are necessary to separate the mineral or minerals from the material from which they are recovered, and (c) carry out on that land any mining purpose. (1A) The holder of a mining lease granted in respect of a mining purpose or mining purposes only may, in accordance with the conditions of the lease, carry out the mining purpose or mining purposes specified in the lease.

Grounds of Review

There were four principal grounds of review raised in respect of the decision to issue the exemption order. In short, the applicants contend that the order is invalid because: 1. first, the Minister had no power to grant a mining lease with respect to the land by reason of the operation of s 63(5) of the Act; 2. second, the Minister had no power to grant a mining lease with respect to the land by reason of the operation of s 58(1)(a) and (c)(i) of the Act; 3. third, the power to issue the order was exercised for an improper purpose, namely, to circumvent the operation of ss 58(1) and 63(5) of Act, which had the effect of preventing the grant of a mining lease for the land by the Minister; and 4. fourth, AEI was denied procedural fairness in the granting of the order because the Minister was required to, but did not, notify AEI that he was considering the grant of an exemption thereby failing to afford it the opportunity to be heard prior to the making of the order.

The Minister Had the Power to Issue the Exemption Order

Because the determination of whether the exemption order was issued absent the requisite power is a question of statutory construction, it is advantageous to examine the legal principles applicable to the proper construction of the Act.
As has been confirmed by a plethora of recent High Court decisions, the task of statutory interpretation begins and ends with a consideration of the text of the statute to be construed. The language must be considered, however, in its context. This includes ascertaining the objective intention, or purpose, of Parliament in enacting the legislation. The context may also include an examination of the legislative history of the statute and any relevant extrinsic materials, but these aids cannot displace the meaning of the text.
The modern approach to statutory construction was summarised by the High Court in Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 where the plurality stated (at [39], citations omitted): 39. "This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text". So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
Where tension arises from the text of competing provisions, the conflict must be resolved by "adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions" (Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [70] quoted in Plaintiff M150 of 2013 v Minister for Immigration and Border Protection [2014] HCA 25; (2014) 88 ALJR 735 at [68] per Hayne and Kiefel JJ). In reconciling seemingly conflicting provisions, it is necessary in relation to each provision to identify "the meaning which best gives effect to its purpose and language while maintaining the unity of all the statutory scheme" (Plaintiff M150 of 2013 at [68] quoting from Project Blue Sky at [76]).

Section 63(5) of the Act

AEI and GCR submitted that the Minister acted beyond power in granting the exemption order because he had no power to grant a mining lease with respect to the land due to the operation of s 63(5) of the Act. In short, the applicants submitted that because the activities on the land were not carried out in the immediate vicinity of the mining lease for Dargues Reef, no mining lease could be granted in respect of the land.
The respondents admit that the processing of ore from Dargues Reef on the land is a "mining purpose" or "mining purposes" under the Act. Furthermore, the Minister admits that a mining lease for mining purposes at the processing plant on the land has not been granted and may not be granted by reason of the operation of s 63(5) of the Act due to the geographical distance between the land and Dargues Reef (a fact accepted by Westlime in its submissions). The question becomes one of statutory construction. Central to the success of the applicants' argument, is an acceptance of the incorporation of the prohibition in s 63(5) into s 6 of the Act. This is elaborated upon below.
Relying by analogy on the authority of Ulan Coal Mines v Minister for Mineral Resources ([2008] NSWCA 174; (2008) 161 LGERA 391 at [83] - [84] per Bell JA), the applicants submitted that the power in s 6(2) and cl 11 of the Regulations to exempt a person, or a class of persons, from carrying out a mining purpose in accordance with an authorisation that is in force assumes, for its valid exercise, that the authorisation is otherwise capable of being granted under the Act. In other words, it is implicit in the power to issue an exemption that the exercise of discretionary power cannot extend to granting an exemption to the requirement to hold a mining lease for mining purposes that could not otherwise lawfully be granted under the Act. Thus, because the Minister employed the device of the exemption to authorise an activity which would otherwise be unlawful under the Act, the order was invalid.
The applicants contended that to construe the legislation otherwise would be "illogical" and would produce "absurd results" by conferring upon the Minister the power to allow the carrying out of mining purposes which "would never be authorised as they are contrary to the rights of authority holders and landowners under the Mining Act". According to the applicants, rights to prospect for a mineral resource under an exploration licence or under a pending application for an exploration licence would be "effectively extinguished" if an exemption from the requirement to obtain a mining lease was granted. It was expected that if the objective intention of Parliament was to extinguish or infringe these rights, express and unambiguous language would be used to do so, language that was absent from the statutory scheme under the Act. Such an approach would be, as the applicants asserted, contrary to the objects of the Act contained in s 3A, particularly s 3A(a) and (b).
To assist in the proper construction of s 63(5) of the Act, the following general observations should be made about the wider context within which the provision is to be interpreted: 1. first, the Act is primarily concerned with minerals, or in the language of the statute, "mineral resources", and not land per se. This is evident at the outset from the objects of the Act listed in s 3A (and see also ss 5, 19 and 33 of the Act); 2. second, unlike s 6, s 5 prohibits mining or prospecting without authorisation but with no provision for an exemption; 3. third, s 6 does not prohibit mining purposes outright. Rather, it only prohibits particular mining purposes (those specified in sub-section (3)). Other ancillary mining activity not falling within the purview of ss 5 or 6 is therefore, permissible without authorisation; 4. fourth, when recourse is had to the definition of "mining purposes" in the Dictionary (see above), it is only those physical activities that are connected with the extraction of minerals referred to therein that are prohibited; and 5. fifth, the power to exempt in s 6(2) is to exempt the operation of the prohibition in s 6(1) in respect of the carrying out of a particular "mining purpose", or a class of "mining purposes", and not, as was submitted by the applicants, the requirement to obtain a mining lease. The grant of an exemption is not tantamount to the grant of a mining lease in substance or effect.
More specifically, in relation to Pt 5 of the Act, within which s 63(5) is located, a mining lease may be obtained for minerals or for mining purposes only (s 51(4)(a)). If the lease if one for minerals, there is an automatic right to carry out mining purposes (s 73(1)). However, if the lease is one for mining purposes only, then it is, as is plain from the text, confined in scope to that mining purpose (s 73(1A)).
The concept of a mining lease for mining purposes only, was inserted into the Act in 1996 by the Mining Legislation Amendment Act 1996 ("the 1996 Act"). Importantly, at the time of the amendment, while the Act required authorisation for the extraction of minerals, no authorisation was required to carry out a mining purpose. In other words, the introduction of mining leases for mining purposes only, occurred at a time when the Act did not include the prohibition currently enshrined in s 6.
The 1996 Act also introduced s 63(5) into the Act. Section 63(5) imposes a geographical constraint on the grant of a mining lease for mining purposes only. The concept of mining leases for mining purposes only is therefore, consistent with the legislative history of s 63(5). It was introduced to enable applicants to obtain mining leases, not limited to specific minerals, provided the leases were in connection with, and in the immediate vicinity of, mineral-specific leases, and not to ensure that certain mining purposes were engaged in only by obtaining a mining lease.
One effect of the insertion of mining leases for mining purposes only in 1996, was to attract a number of legislative privileges associated with a mining lease, including, relevantly for present purposes, the exemption contained in s 65(3) of the Act. That is, if the lease is granted over land the subject of an appropriate development consent pursuant to the EPAA, then the conditions of the consent are void.
The current form of s 6 was enacted by the Mining Amendment Act 2008 ("the 2008 Act"). The 2008 Act was largely concerned with environmental regulation. This included the creation of a prohibition on performing the specified mining purposes described in s 6(3) absent authorisation (s 6(1)). But this prohibition was subject to the exemption contained in s 6(2).
Section 63(5) of the Act says nothing about whether the geographical constraint is to be implied into the exemption power contained in s 6(2). The fact that at the time of the promulgation of s 63(5) in 1996, s 6 was not enacted, is a powerful indicator that it should not.
Equally, there is nothing in the language of s 6 which suggests that the exemption is intended to be available only where the Act permits the Minister to grant a mining lease for mining purposes. The power in s 6(2) is not expressly constrained other than its exercise must have regard to the scope and objects of the Act (Minister for Aboriginal Affairs v Peko-Wallsend [1986] HCA 40; (1986) 162 CLR 24 at 40). Nor, in my view, having regard to the context and purpose of the Act, is the limitation contained in s 63(5) implied into s 6 of the Act.
It is not correct to say, as the applicants did, that s 63(5) contains a limitation on the Minister's power to grant a lease together with a discretion in respect of the exercise of that power in s 6. This misconceives the two statutory functions. Both are wholly separate powers that involve wholly separate discretionary considerations, notwithstanding their potentially overlapping scope. There is no warrant to construe the power is s 6(2) so that it is only available when the limitation in s 63(5) does not apply.
In this context, it is important to note that an exemption under s 6 of the Act is not to be, as the applicants' submissions suggest, equated with a mining lease. The exemption order issued by the Minister did not give Big Island or Westlime the right to carry out mineral extraction or exploration on the land, nor did it exempt them from the application of the EPAA. If Big Island and Westlime wish to conduct mining purposes with all the benefits of a mining lease, it is incumbent upon them to obtain a mining lease and not merely an exemption. In other words, it is only if a mining lease is sought that the prohibition in s 63(5) is engaged. Accordingly, rights that both AEI and GCR enjoy under their respective licences to explore for minerals have not been "in effect extinguished", as was contended by the applicants.
The principle of legality upon with AEI and GCR placed weight, viz, that if rights which otherwise exist under the Act are to be denied or infringed, clear and unambiguous language is required (citing Australian Education Union v General Manager of Fair Work Australia [2012] HCA 19; (2012) 246 CLR 117 at [30]. More recently, see the discussion in Lee v New South Wales Crime Commission [2013] HCA 39; (2013) 251 CLR 96 at [171] - [173] per Kiefel J, [307] - [316] per Gageler and Keane JJ) is misplaced when regard is had to the terms of the impugned exemption order. The order neither denies the right of either AEI or GCR to prospect for, or access, minerals under their exploration or pending exploration licences, nor does it amount to the grant of a mining lease for a mineral or minerals, as the applicants imply. Further, the grant of the exploration licences does not concern a fundamental right, privilege or immunity that enlivens the application of that principle (Gifford v Strang Patrick Stevendoring Pty Limited [2003] HCA 33; (2003) 214 CLR 269 at [36] per McHugh J). The statutory rights claimed by the applicants can rise no higher than the terms of the statute, and to this extent, there is no right to object to the grant of an objection issued pursuant to s 6 of the Act. This may be contrasted with s 59 of the Act where notice of an application for a mining lease over land the subject of an exploration licence must be served on the holder of that exploration licence.
As both the Minister and Westlime submitted, if activities constituting mining purposes that are not in connection with, and in the vicinity of, a mining lease for minerals or a mineral claim, do not engage the power to exempt in s 6(2) of the Act, it would be almost impossible to carry out mining purposes of the kind described in s 6(3). Having regard to the objects of the Act contained in s 3A, it is highly unlikely that this was what the legislature intended.
I therefore do not find that the exemption order was made beyond power by reason of the application of the limitation contained in s 63(5) of the Act.

Section 58(1)

The applicants similarly submitted that the Minister's power to grant an exemption under s 6(2) of the Act was constrained by the operation of s 58(1)(a) and (1)(c) of the Act. This argument rests on the premise that s 58(1) prevents the granting of a mining lease for the mining purposes of the proposed processing activities, the subject of the exemption, in the absence of any written consent from the applicants.
The applicants asserted that, first, pursuant to s 58(1)(a) of the Act, the Minister could not have granted a mining lease over the land other than with the written consent of AEI (as the holder of EL7242) that includes "any mineral or minerals in respect of which the mining lease is sought". And second, pursuant to s 58(1)(c), the Minister could not grant a mining lease over the land other than the consent of GCR as there exists an application pending for an exploration licence (ELA4916) that includes minerals "in respect of which the mining lease is sought". This is because not only are EL7242 and ELA4916 applications for minerals for the purposes of the Act, but also because a mining lease for mining purposes could not be granted for land because both EL7242 and ELA4916 "includes minerals in respect of which the mining lease is sought". Accordingly, the applicants argued that having regard to the text, context and purpose of s 58 of the Act, the term "mining lease" within that provision ought not be narrowly construed to mean only to a mining lease for minerals, but should be interpreted to include a mining lease for mining purposes.
Given that ELA4916 was lodged on 11 November 2013, that is to say, after the exemption order was issued in May 2013, the submissions made on behalf of GCR cannot be maintained because its application for an exploration licence was not "lodged before the application for the aforementioned mining lease" as required by s 58(1)(c) of the Act.
However, ignoring this fact for the sake of the arguments raised by the parties in respect of this ground of review, in my opinion, the ground must, in any event, be rejected. First, consistent with the conclusion reached above in relation to s 63(5) of the Act, there is no reason to find an implied restriction in s 6 of the Act that an exemption can only be granted if a mining lease could be lawfully granted for the same purpose.
Second, properly construed, s 58(1) does not require the applicants' consent to a mining lease for mining purposes only. As the text of the provision indicates, the consent of AEI and GCR is required only if the exploration licence, or the application for an exploration licence, includes "any mineral or minerals in respect of which the mining lease is sought" (s 58(1)). While a mining lease (as defined) may include both a mining lease granted under Pt 5 for minerals and a mining lease for mining purposes, a mining lease for mining purposes only cannot be sought in respect of any mineral or minerals. This is, in my view, made plain by s 51(4)(a) of the Act. Similarly, while a mining lease in respect of minerals incorporates a right to carry out mining purposes under s 73(1) of the Act, a mining lease for mining purposes or for mining purposes only, by contrast, permits only those mining purposes specified in the lease (s 73(1A)).
The distinction between the act of extracting minerals and other acts which facilitate mining (or mining purposes) is reinforced throughout the regulatory regime of the Act (compare, for example, the definition of "mine" when used as a verb and the definition of "mining purpose" and see also ss 65(1), 70(1A), 72(b), 73(1) and (1A) and 75(1A) of the Act). As Westlime noted in its submissions, this distinction has been a central feature of the Act since at least 1906 (see s 23(a) and (b) of the Mining Act 1906 and ss 53(2) and 55 of the Mining Act 1973, where the distinction was reflected in separate categories of leases for mining and leases for mining purposes).
Put another way, because mining leases issued for mining purposes only are not mining leases "in respect of" any minerals, they are outside the purview of s 58(1). Although the words "in respect of" are words of wide import, they "have a chameleon-like quality in that they commonly reflect the context in which they appear" (Technical Products Pty Ltd v State Government Insurance Office (Queensland) [1989] HCA 24; (1988) 167 CLR 45 at 47 (per Brennan, Deane and Gaudron JJ)). In this instance, the context makes it clear, in my view, that the phrase "in respect of which the mining lease is sought" is to be limited in the manner discussed above. If, therefore, there are no minerals the subject of a mining lease sought, because the lease is for mining purposes only, then the holder of the mining lease will not be permitted extract them, s 58(1) will not be engaged, and the rights and interests of the applicants as holders of exploration licences conferred by the Act will be preserved.
Properly construed having regard to the text of s 58(1), its context, and the objects of the Act, the provision only applies where a mining lease is sought to mine for the same mineral or minerals as covered by an exploration licence or an application for such a licence. It has no application to a mining lease for the particular mining purposes of processing of iron ore on the land.
That an exploration licence and a mining lease for mining purposes only, can exist simultaneously on the land is, having regard to the scheme of the Act described above, unremarkable and in conformity with both the structure and the objects of the Act (see s 3A(a), (b) and (c)). No infringement or extinguishment of the applicants' rights or interests occurs by the grant of the exemption as a consequence, and nor does any "absurdity" result.
For these reasons, this ground of review must be dismissed.
It follows that I find that in issuing the exemption order the Minister acted within power.

The Purpose in Granting the Exemption Was Not Improper

The applicants accepted that "if we lose on the 'beyond power' and both parts of it…we would lose on 'improper purpose'" (T20.06). Logically this must be so and given my conclusion that the exemption order was not beyond the power of the Minister to issue, this ground must fail.
If, as the Court has found, the Minister has the power to grant the exemption order under s 6 of the Act, there is nothing improper about the discretionary exercise of this power merely because other statutory mechanisms for relieving the statutory prohibition are not factually available. On the contrary, this is the very circumstance in which the exercise of the power under s 6(2) would be appropriate and expected.
However, in case my findings above are incorrect, I shall proceed to examine whether the granting of the exemption order was for an improper purpose as alleged by the applicants.
An exercise of power will be vitiated if it is exercised for an ulterior purpose and not for a purpose authorised by the legislation, even if that ulterior purpose was not the sole purpose of the exercise of the power. It is sufficient if the ulterior purpose was a substantial purpose for the exercise of the power (Thompson v Randwick Corporation [1950] HCA 33; (1950) 81 CLR 87 at 105-106 per Williams, Webb and Kitto JJ and Samrein Pty Ltd v Metropolitan Water Sewerage and Drainage Board (1982) 56 ALJR 698 at 468-469 per Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ; Marrickville Metro Shopping Centre Pty Ltd v Marrickville Council [2010] NSWCA 145; (2010) 174 LGERA 67 at [132] per Tobias JA and Mandurah Enterprises Pty Ltd v Western Australian Planning Commission [2010] HCA 2; (2010) 240 CLR 409 at [35] and [36] per French CJ, Gummow, Crennan and Bell JJ).
The applicants submitted that the Minister issued the exemption order for an improper purpose, namely, in order to circumvent the operation of ss 58(1) and 63(5) of the Act, that would have had the effect of preventing a grant of a mining lease for the land by the Minister.
In respect of the alleged avoidance of the need for consent under s 58(1)(a) and (1)(c) of the Act, the applicants relied upon the following material as evidence of the Minister's improper purpose: 1. email correspondence dated 11 February 2013, between Mr Rod George, Team Leader Eastern Region Titles of the Department of Trade and Investment ("the Department") and Mr Robert Mew, Team Leader Western Region of the Department, which expressly stated that the proposed exemption "would remove the opportunity for other parties to object or raise the noncompliance with the Sec 6 to these types of operation etc"; 2. the briefing note to the Minister (also prepared by Mr George, and subsequently endorsed by the Minister) on 14 May 2013, which made reference to the fact AEI was the holder of an exploration licence over the land; and 3. the Minister's statement of reasons which referred to the fact that AEI held an exploration licence over the land and had raised an objection to the proposed use of the land.
In respect of the alleged avoidance of the effect of s 63(5) of the Act, the applicants proffered: 1. the email correspondence dated 11 February 2013 referred to above, which expressly stated that the proposed exemption would "remove clear [sic] the issue of s63(5) in the immediate vicinity of the Mine"; 2. the briefing note to the Minister prepared on 11 April 2013 and endorsed by the Minister on 14 May 2013, which stated; Section 63(5) of the Mining Act 1992 prevents a mining lease for mining purposes being granted unless the decision-maker is satisfied that the mining purposes will be carried out "in connection with and in the immediate vicinity" of a mining lease for mineral. … The granting of this order will allow the BIM and Westlime projects to continue without the grant of a mining lease for purposes as is required under the provision of section 6 of the Act. This situation has occurred due to an unintentional outcome of previous amendments to the Act with section 63(5) being an obstacle to the granting of an authority under the act. Steps to amend the legislation have commenced. 1. the exemption order which only applied to the respondents in respect of the land; and 2. the Minister's statement of reasons which stated that: Given the geographical distance between ML 1675 and the Site, it is not considered possible to grant a mining lease for mining purposes at the Site due to the operation of s63(5) of the Act.
Specifically, the applicants submitted that the purpose of the power in s 6(2) of the Act was to provide an exception to the requirement for the prior grant of an authorisation for certain specified mining purposes where such mining purposes could otherwise be authorised under the Act. They argued that it was not consistent with the objects of the Act (particularly s 3A(b)) for s 6(2) to be construed to permit a "case by case" exemption from the prohibition contained in s 6(1) to avoid "inconvenient provisions" of the Act which constrain the Minister's power to grant a mining lease (in this instance, the limitations contained in ss 58(1) and 63(5) of the Act).
The applicants further contended that it could be inferred from the evidence averted to above that a substantial purpose of the exercise of the power to grant the exemption order was to remove the opportunity for the applicants (as holders of exploration licences or prior applicants for exploration licences) to object or refuse to grant consent to an application for a mining lease.
Neither submission ought to be accepted. As the Minister submitted, his reasons make it tolerably clear that, which I accept, the primary reason for granting the exemption order is the importance of Big Island and Westlime being able to process iron ore on the land. The device of issuing an exemption under s 6(2) was chosen because it was not possible to grant a mining lease for mining purposes only, because of the distance between the relevant land and the actual mining operations. Because the provision authorises exemptions in these circumstances there was nothing improper or illegitimate in the Minister availing himself of this mechanism in granting the order. The evidence relied upon by the applicants was consistent with this primary reason.
In addition, the Minister was satisfied that the activities the subject of the proposed exemption furthered the interests of the State by facilitating the development of mineral resources at Dargues Reef and secured the economic and social benefits of that development. Having formed this opinion, it was entirely proper for the Minister to have recourse to the power contained in s 6(2) of the Act to issue the exemption order.
There is, moreover, insufficient evidence before me that would permit the inference to be drawn that a substantial purpose (rather than a purpose) in granting the exemption order was to remove the opportunity for other parties, namely, the applicants, to object or refuse to consent to the mining lease. The Minister wanted to authorise activities that could not be authorised by a mining lease for mining purposes only. He correctly took the view that an exemption under s 6(2) was available and proceeded to exercise his power to issue one.
Finally, there is nothing improper or illegitimate in exercising a discretionary exemption power to avoid the outcome of legislation that is perceived to be unintended. This is precisely what occurred in the present case. The interaction of two provisions that were introduced into the Act at different times has produced an outcome that, if the applicants' position were accepted, would result in the Act prohibiting the carrying out of mining purposes of the kind described in s 6 otherwise than in the immediate vicinity of actual mining.
In short, the purpose for which the exemption order was granted was entirely proper and this challenge to the Minister's decision fails.

There Has Been No Breach of Procedural Fairness in Granting the Exemption Order

Alternatively, the applicants contended that the exemption order was invalid on the grounds of procedural unfairness because the Minister failed to notify AEI that he was considering the grant of an exemption and failed to afford the opportunity for AEI to be heard prior to the decision being made.
In the seminal decision of Kioa v West [1985] HCA 81; (1985) 159 CLR 550 the High Court held that a decision which affects an individual's rights or interests will attract a common law duty to accord procedural fairness (at 584). This duty, however, is subject to two limitations. First, as a common law duty it is subject to a clear manifestation of contrary statutory intention. Second, and relevant to these proceedings, the duty arises only if the individual's rights or interests are affected in "a direct and immediate way" (at 584). Or, as was recently formulated by Gageler J in CPCF v Minister for Immigration and Border Protection, "the implication of procedural fairness is the product of a strong common law presumption applicable to any statutory power the exercise of which is capable of having an adverse effect on legally recognised rights or interests" ([2015] HCA 1 at [367]).
A central hallmark of the duty to afford procedural fairness is its flexibility. Thus (CPCF at [367] per Gageler J): …Procedural fairness as implied in some contexts can have a flexible, chameleon-like, content capable of varying according to the exigencies of the exercise of power between nothingness at one extreme and a full-blown trial at the other. To imply procedural fairness as a condition of the lawful exercise of a statutory power is therefore not necessarily to require a hearing in every case in which the power might be exercised. Ordinarily, procedural fairness does not require providing a person whose interests are likely to be affected by an exercise of statutory power any greater opportunity to be heard than is reasonable in all the circumstances.
As has been discussed above, the exemption order does not derogate from the applicants' rights under their actual or putative exploration licences. In this regard, it is significant that the applicants have adduced no evidence of the manner in which their rights or interests are said to be affected by the granting of the exemption order.
This is no doubt because the exemption merely removes a prohibition that would otherwise apply to Big Island and Westlime from carrying out specific mining purposes on the land in circumstances where there is no other prohibition on them undertaking other mining purposes on the land, and where, since 2001, Westlime has used the land for processing limestone and hard rock products. Thus even prior to the exemption, all mining activities except the proscribed mining purposes, including the stockpiling of materials for the construction of dams were permissible. Further, the exemption does not give Big Island or Westlime the privileges and benefits of a mining lease, or affect the priority of the applicants' exploration entitlements to prospect. It does not, for example, exempt the respondents from the application of the EPAA, as is apparent from the consent granted by the council to Westlime in respect of the recommencement and extension of the London-Victoria Mine, referred to above and presently the subject of challenge in this Court by AEI.
The applicants additionally submitted that they had suffered "practical injustice" because they had been denied the right to object to the proposed activity the subject of the exemption under s 58(1) and 62(1)(c) of the Act (Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2013] HCA 6; (2003) 214 CLR 1 at [38] per Gleeson CJ).
Section 62(1)(c) of the Act states as follows: 62 Dwelling-houses, gardens and significant improvements (1) A mining lease may not be granted over the surface of any land: … (c) on which is situated anything that is taken to be a significant improvement under clause 23A of Schedule 1,
The rights created by ss 58(1) and 62(1), however, again extend no further than the statute contemplates. That is to say, they are statutory rights that are subject to other provisions within the Act, including the exemption power contained in s 6(2).
Moreover, in relation to s 62(1) of the Act the respondents are presently unconstrained in engaging in activity that improves the land, subject to the application of the EPAA and provided the activity is not a mining purpose or purposes that falls outside s 6(3) and cl 23A of Sch 1 of the Act - the latter of which, in any event, contemplates the Minister's agreement that the improvement is a "significant" one. It is at this point in the process that a holder of an exploration licence will be afforded the opportunity of making representations to the Minister.
Similarly, if an application for a mining lease is lodged in respect of land that is subject to an exploration licence, the holder of that licence must be given notice of the application by the decision maker (s 59 of the Act).
On any view, therefore, no "practical injustice" will arise.
For these reasons, the Minister did not fail to afford procedural fairness to the applicants in granting the exemption order.

Orders

Because the applicants have been unsuccessful in their challenge to the granting of the exemption order, the amended summons must be dismissed, with costs. The formal orders of the Court are therefore that: 1. the amended summons is dismissed; 2. the applicants are to pay the costs of the first and third respondents; and 3. the exhibits are to be returned.

Amendments 23 February 2015 - Cover page amendment to Representation. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 February 2015

(2008) 161 LGERA 391

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