Supreme Court of WA|2011-08-30|Before: Warden P, Beech J

RE WARDEN P ROTH; EX PARTE CAZALY IRON PTY LTD [2011] WASC 226 (30 August 2011)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : RE WARDEN P ROTH; EX PARTE CAZALY IRON PTY LTD [2011] WASC 226

MATTER : An application for a writ of certiorari directed to Warden P Roth, Warden of Mines sitting in Karratha

Administrative law - Procedural fairness - Application for show cause order - Whether applicant had a right to be heard prior to a decision that its applications for exploration licences not be included in a ballot under s 105A Mining Act 1978 (WA) - Whether warden's conduct was contrary to the requirements of procedural fairness - Whether in the circumstances procedural fairness required the warden to reveal his tentative conclusion that the applications did not comply with the initial requirements

Apache Northwest Pty Ltd v Agostini [No 2] [2009] WASCA 231

Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576

Ex parte Aberfoyle Resources Ltd (Unreported, WASCA, Library No 7612, 19 April 1989)

Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149

Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149

Re Her Honour Judge Schoombee; Ex parte Attorney General for Western Australia [2011] WASC 23

Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1

Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403

Re Warden S Richardson; Ex parte Binthalya Holdings Pty Ltd [2011] WASC 56

SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152

1 The applicant lodged applications for exploration licences. By letter of 29 November 2010, the warden determined that the applicant's applications did not meet the initial requirements under s 58 of the Mining Act 1978 (WA) (the Act) and consequently would be excluded from the ballot under s 105A of the Act.

2 The applicant seeks an order nisi requiring the warden to show cause why that decision should not be quashed on the grounds that the warden failed to afford the applicant procedural fairness. The applicant also sought, in the alternative, an order absolute for a writ of certiorari. For the reasons that follow, I would grant an order nisi, but would not make an order absolute in the first instance.

3 It is convenient to begin by referring to the relevant provisions of the Act, before outlining the facts.

The Mining Act

4 Section 58 sets out requirements for an application for an exploration licence. Section 58(1) provides as follows:

An application for an exploration licence -

(a) shall be in the prescribed form;

(b) shall be accompanied by a statement specifying -

(i) the proposed method of exploration of the area in respect of which the licence is sought;

(ii) the details of the programme of work proposed to be carried out in such area;

(iii) the estimated amount of money proposed to be expended on the exploration; and

(iv) the technical and, subject to subsection (1aa), financial resources available to the applicant;

(c) shall be accompanied by the amount of the prescribed rent for the first year of the term of the licence or portion thereof as prescribed;

(d) shall be lodged at the office of the mining registrar; and

(e) shall be accompanied by the prescribed application fee.

5 The warden found that the applicant's applications did not comply with the requirement in s 58(1)(b)(iv) to specify the financial resources available to the applicant. I will refer to this requirement as the financial resources initial requirement.

6 Section 105A governs the determination of priorities between applicants for various tenements including exploration licences. Section 105A(1), s 105A(3) and s 105A(4)(a) provide as follows:

(1) Subject to section 111A, where more than one application is received for a mining tenement (other than a miscellaneous licence) in respect of the same land or any part thereof, the applicant who first complies with the initial requirement in relation to his application has, subject to this Act, the right in priority over every other applicant to have granted to him in respect of that land or part the mining tenement to which his application relates.

...

(3) Where in respect of any land the warden is satisfied that 2 or more applicants complied with the initial requirement in relation to their applications at the same time, priority shall, unless written agreement is concluded by the applicants and lodged at the office of the mining registrar within the prescribed time, be determined by ballot conducted by the warden on a date to be determined by the warden and notified to the applicants.

...

(4) In this section a reference to compliance with the initial requirement in relation to an application is a reference -

(a) in the case of an application for an exploration licence, to lodging that application at the office of the mining registrar.

7 The effect of s 105A(3) is that if the warden is satisfied that applications which complied with the initial requirement were lodged at the same time, it follows by force of the Act that a ballot is necessary: Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149, 167 - 168.

8 The following facts appear from the two affidavits of Ms Jemimah Mills relied on by the applicant.

9 At 8.30 am on 20 November 2009, the applicant lodged application E47/2189. Attached to the application was a page described as a 'Financial Ability Statement', comprising a balance sheet for Cazaly Resources Ltd as at 30 June 2008. The sheet included a handwritten note that the applicant is a wholly owned subsidiary of Cazaly Resources Ltd.

10 At the time application E47/2189 was lodged, the 2008 balance sheet was not the most recent for Cazaly Resources Ltd. The 2009 annual report, including its balance sheet, had been lodged with the Australian Stock Exchange in September 2009. Ms Mills says in her affidavit that she was informed by Mr McMahon, a tenement consultant to the applicant, that the most recent balance sheet was not included in the supporting documentation due to an administrative error.

11 Also on 20 November 2009 at 8.30 am, various third parties lodged applications E47/2191, E47/2193, E47/2194, E47/2197, E47/2198, E47/2200 and E47/2201 in respect of the same or overlapping ground.

12 At 8.30 am on 30 April 2010, the applicant lodged applications E47/2351 and E47/2352. Each application was accompanied by a copy of the balance sheet of Cazaly Resources Ltd as at 30 June 2009, with the statement that the applicant is a wholly owned subsidiary of Cazaly Resources Ltd. The balance sheet of Cazaly Resources Ltd showed net assets of the group of just under $14 million.

13 At the time that these tenements were lodged, the balance sheet of 30 June 2009 was the most recent financial statements for Cazaly Resources Ltd.

14 Also at 8.30 am on 30 April 2010, other third parties lodged applications E47/2345, E47/2346, E47/2347, E47/2348, E47/2353 and E47/2354 in respect of the same or overlapping ground.

15 By letter of 29 November 2010 to the applicant, the warden acknowledged receipt of the application for exploration licence no 47/2189. The letter stated that:

(a) a number of other competing applications had been received at the same time;

(b) accordingly, ballots would be needed to be conducted to determine priority;

(c) in assessing the applications to ensure all applications satisfied the initial requirements, the warden had 'noted' that the applicant's application fails to meet the initial requirements as it does not specify the financial resources available to the applicant;

(d) a copy of the applicant company's balance sheet as at 30 June 2008 is not considered sufficient; and

(e) as the application did not comply with the initial requirements contemporaneously with the competing applications, it must be excluded from the ballot.

16 The warden wrote a letter in substantially identical terms in relation to applications 47/2351 and 47/2352. The only material difference in the letters is that the letter regarding these latter applications referred to the balance sheet as at 30 June 2009 as not being considered sufficient.

17 Prior to 29 November 2010, the warden did not seek any further information from the applicant or intimate that he considered that the applicant's applications did not or might not comply with the initial requirements as regards specifying the financial resources available to the applicant.

18 By letter of 3 December 2010, the applicant's tenement agent wrote to the mining registrar in response to the warden's letter of 29 December 2010. The applicant's agent's letter stated that:

(a) the applicant considered the warden's letter as an expression of intention to exclude the applicant's applications from the ballot, not as decisions to exclude;

(b) the applicant had previously applied for and been granted exploration licences in the same form as these applications; and

(c) the applicant considered that, as a matter of procedural fairness, it was entitled to an explanation of why the balance sheet with the application failed to meet the financial resources initial requirement and to an opportunity to make submissions as to why the applications should be included in the ballot.

19 The letter concluded by stating that if the applicant were not given this opportunity, it would apply to the Supreme Court to quash the ballot decision on the ground that the applicant had not been afforded procedural fairness.

20 A letter in the same terms was written in relation to each of the three applications.

21 The mining registrar responded on behalf of the warden by letter of 12 January 2011. By this letter, the warden:

(a) stated that his earlier letter was not an expression of intention to exclude from the ballot, it was a decision that the applicant did not comply with the initial requirements in s 58(1)(b)(iv) of the Mining Act;

(b) stated that the question of whether the applicant had complied with the initial requirements is a question of fact and solely an issue for the warden, referring to the unreported decision of the Full Court of the Supreme Court in Ex parte Aberfoyle Resources Ltd (Unreported, WASCA, Library No 7612, 19 April 1989);

(c) asserted that the applicant was not entitled to any explanation or to make submissions on why the information provided should be accepted as sufficient;

(d) stated that the requirement in s 58(1)(b)(iv) is for the applicant to specify the financial resources available to it as at the date of the application, and that information as to the applicant's financial situation nine months before the application did not satisfy that requirement; and

(e) stated that information that was not more than six months old would be accepted.

22 The ballots in respect of the land covered by the applicant's three applications have not occurred. That process has been put on hold pending the applicant's application in these proceedings.

23 The applicant's case involves the following propositions:

(1) the decision as to whether the applicant's application for exploration licences simultaneously satisfied the initial requirements with the other applications attracts a duty of procedural fairness;

(2) in making the determination in the letter of 29 November 2010, without seeking further information or submissions from the applicant, the warden acted in breach of the duty of procedural fairness;

(3) there is no discretionary reason to refuse the grant of relief;

(4) the applicant's right to a writ of certiorari to quash the warden's decision is so clear that the court should exercise its discretion under O 56 r 1(6) to grant an order absolute for a writ of mandamus;

(5) alternatively to (4), the court should be satisfied that the applicant has an arguable case and grant an order nisi accordingly.

24 No party appeared to contradict the applicant's claims.

25 The warden has filed a notice of intention not to appear or be heard. The other parties who have applied for exploration licences over the same or overlapping ground as the applicant were given notice of the hearing of the applicant's application. They were also given notice that at that hearing the applicant would seek an order absolute for a writ of certiorari. No party appeared to oppose the applicant's case.

26 The threshold test of the requisite strength of an applicant's case to sustain the grant of an order nisi has been formulated in different ways. The different formulations, and many of the authorities, were analysed by Corboy J in Re Her Honour Judge Schoombee; Ex parte Attorney General for Western Australia [2011] WASC 23 [11] - [18]. Some of the authorities hold that it is sufficient that there be an arguable case, and explain what that means in a way that makes it a low threshold. In other authorities, it has been suggested that an order nisi should not be granted unless there is an arguable case that has some reasonable prospect of success. Because I am satisfied that the applicant's case has a reasonable prospect of success, it is not necessary for me to express any preference between the competing formulations.

27 Order 56 r 1(6) gives the court a discretion to make an order absolute in the first instance. In Re Warden S Richardson; Ex parte Binthalya Holdings Pty Ltd [2011] WASC 56, Corboy J exercised that power. One of the grounds on which he did so was that he had 'no doubt' that the decision under challenge should be quashed: [37]. Senior counsel for the applicant in this case accepted that the court would need a high level of assurance before it would exercise the power to make an order absolute for a writ of certiorari in the first instance.

28 I am satisfied that the applicant's first proposition, set out above, is correct. In my view, the decision as to whether the applicant's application for an exploration licence simultaneously satisfied the initial requirements with the other applications (thereby engaging s 105A) sufficiently affects the applicant's rights and interests to attract a duty of procedural fairness: Hot Holdings v Creasy; Re Warden S Richardson; Ex parte Binthalya Holdings Pty Ltd [23] - [24].

29 In my view, the real question in this case is not whether a duty of procedural fairness arose, but rather the content of the duty. In particular, the question is whether, as the applicant submits (ts 10), procedural fairness required the warden to indicate to the applicant that he considered that the material accompanying the applications did not or might not satisfy the financial resources requirement, and invite the applicant's submission. For the reasons that follow:

(1) I am satisfied that the applicant's contention has reasonable prospects; and

(2) I am not persuaded, on the material admissible on an application for final relief, that an order absolute should be made in the first instance.

The content of the duty of procedural fairness - general principles

30 Procedural fairness is a practical concept. The purpose of the law of procedural fairness is to avoid practical injustice: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 [37]; Re Minister for Resources; Ex parte Cazaly Iron Pty Ltd [2007] WASCA 175; (2007) 34 WAR 403 [272], [329]; Apache Northwest Pty Ltd v Agostini [No 2] [2009] WASCA 231 [213].

31 The content of the requirements of procedural fairness depends on the statutory context and all of the circumstances of the case. Martin CJ explained the position in Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149 [3] - [4] as follows:

It is well established that the precise content of the requirements of procedural fairness in any particular case will depend critically upon the statutory framework within which the relevant power falls to be exercised, and the facts and circumstances of the particular case - see SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152. Because of the large variety of statutory frameworks in which the obligation to provide procedural fairness arises, and the infinite variety of factual circumstances in which the determination of the precise content of the requirements of procedural fairness might arise, it is impossible to lay down a universally valid test or norm which can be applied to determine whether procedural fairness has been provided in each and every case - see Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 CLR 475, at 503 - 504, (cited with approval in SZBEL).

A court required to determine whether a decision maker has departed from the requirements of procedural fairness must therefore analyse all facts and circumstances relevant to the purported exercise of the power, viewed in the context of the statutory framework conferring the relevant power, for the purposes of ascertaining whether there has been practical injustice in the particular case - Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37].

32 In Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576, the Full Court of the Federal Court said:

Where the exercise of statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question (591 - 592).

33 This statement of principle has been applied in many cases. It was referred to with evident approval by Buss JA in Apache Northwest [217].

34 In this case, the applicant relied on the statement that a decision-maker is required to advise of any adverse conclusion that is not obviously open on the known material.

35 In SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 [30] - [32] the High Court said that caution was needed in applying the principles stated in that passage. It is wrong to assume that the question of what was required by procedural fairness involves a choice between a dichotomy of two categories (conclusions not obviously open on the known materials; and mental processes of decision-making). Those two categories do not necessarily cover the universe of possibilities. Moreover, such an approach may distract attention from the fundamental principle. The fundamental principle is that an opportunity to be heard would 'ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material' [32].

36 In Apache Northwest, Buss JA stated (Wheeler & Newnes JJA agreeing [1]) that, generally, procedural fairness does not require the decision-maker to reveal a proposed conclusion to a person to whom procedural fairness must be accorded but, in a particular case, it may be necessary for an adverse conclusion to be disclosed with an opportunity to make submissions, if the proposed conclusion could not reasonably have been anticipated: [217] - [218].

37 Senior counsel for the applicant invites application of these principles to the present case. He submits that in the circumstances of this case, the conclusion reached by the warden could not reasonably have been anticipated.

The applicant's submissions and the proper disposition of the application

38 The applicant relies on a number of matters in support of its contention that, in the circumstances, procedural fairness required the warden to invite submissions from the applicant before coming to the conclusion that the applicant's application did not comply with the financial resources initial requirement.

39 First, the applicant invites application by analogy of what was said by Corboy J in Re Warden S Richardson; Ex parte Binthalya Holdings Pty Ltd:

What will be required to give an applicant an opportunity to be heard on the question of whether a ballot must be conducted will depend on the particular circumstances. For example, it may be appropriate for a warden to examine the application files and to advise the applicants that a preliminary view had been formed from that examination that the applications simultaneously satisfied the initial requirement for a ballot. The applicants could then be invited to indicate whether they wished to be further heard on the question of whether a ballot must be conducted and if so, why they wished to be heard. A decision could then be made by the warden as to how an applicant who sought to be heard should be given that opportunity. It may, for example, be sufficient for the warden to invite written submissions or it may be necessary for a hearing to be convened; that will depend on what the applicant indicated that it wished to raise in light of the preliminary view expressed by the warden. In other instances, the lodging of an objection may serve to define the procedure by which the question of whether there must be a ballot is to be resolved [31].

40 I am not persuaded that what was said by Corboy J in that case assists in ascertaining the content of the duty of procedural fairness in the very different factual context of the present case. In Re Warden S Richardson, the applicant and the respondent had each lodged applications on the same day for exploration licences over the same ground. Both parties' applications were endorsed as having been received at 8.30 am. However, the applicant lodged an objection to the respondent's application being included in any ballot. The warden ordered that there be a ballot without hearing the applicant's objection. If the applicant's objection to the respondent's application being in the ballot had been upheld, there would have been no other contemporaneous application and, consequently, no ballot.

41 His Honour's observations about the content of the duty of procedural fairness arose in, and must be understood in, that context. I do not think they provide assistance, one way or the other, on the question of whether an applicant is entitled to put submissions before the warden finds that the material advanced by the applicant to satisfy one of the initial requirements was inadequate.

42 Secondly, senior counsel points to the staleness of the applications by the time they were considered by the warden. The warden's letter of 29 November 2010 came twelve months after application E47/2189 was lodged and seven months after the applicant lodged its other two applications. The applicant points out, correctly, that under s 58(3) of the Act, the warden has power to request further information from an applicant. The applicant submits that given the warden's apparent concern that the financial information attached to the application was not current, the warden should have exercised his power under s 58(3) to request more up-to-date financial information.

43 I am not persuaded by this submission. The warden's decision in his letters of 29 November 2010 was not based upon the lack of currency of the financial information as at November 2010. The warden's focus was only upon the financial resources of the applicant at the time that each application was made. Further, s 58(3) empowers the warden to request further information (and creates a duty on the part of an applicant to respond to such a request). Section 58(3) does not create any duty on the part of the warden. I am not persuaded that the circumstances of this case gave rise to any duty on the part of the warden to exercise his power under s 58(3).

44 Thirdly, the applicant submits that the warden's conclusion about the financial resources initial requirement was one that could not naturally have been anticipated. In that regard, the applicant:

(a) emphasises that the balance sheet of Cazaly Resources Ltd revealed a net equity of almost $14 million, whereas the expenditure requirements for the exploration licences were each less than $50,000;

(b) points to the published policy of the Mines Department about how to comply with the financial resources initial requirement;

(c) submits that, with the exception of the administrative error in including the previous year's balance sheet for E47/2189, the financial resources information accompanying the applications complied with the Mines Department's policy;

(d) points to the evidence of Ms Mills, on information and belief, that Mr McMahon has lodged about 400 applications for exploration licences per year, for many years, in compliance with the guidelines, and has never previously had an application for an exploration licence by a listed company rejected on the basis of insufficient information on financial resources.

45 In my view, these matters give rise to an arguable case with reasonable prospects of success.

46 Senior counsel rightly accepted that the evidence on information and belief was admissible in support of the application for an order nisi, but not in support of the application for the final relief by way of an order absolute. The applicant can file further affidavits in support of its application for an order absolute: O 56 r 8.

47 The Mines Department guidelines include a statement to the following effect:

If the applicant is a company it must provide a copy of its current annual report, or its financial statement (e.g. copies of the relevant pages from the annual report) or an assurance from its accountant or external auditor of its financial capacity to fund the proposed work program. If expenditure is to be provided by an applicant's parent company or subsidiary, an assurance as outlined above must be provided by that company's or subsidiary's accountant or external auditor of its financial capacity.

48 The applicant contends that it satisfied the requirement in the first sentence of the passage I have quoted. There is room for debate about that proposition. That sentence envisages a copy of the annual report or financial statement of the applicant company. In this case, the applicant provided a copy of the financial statement of its parent company. I note, however, that this was not a point made by the warden in his letters.

49 I am not satisfied on the evidence admissible on a claim for final relief that the applicant's case calls for an order absolute in the first instance. I am satisfied that the applicant has an arguable case with reasonable prospects of success. Accordingly, an order nisi should be granted.

50 For the reasons I have given, I would grant an order nisi. Orders should be made substantially to the effect sought in the applicant's notice of originating motion. I will hear from counsel as to the precise form of orders.

Apache Northwest Pty Ltd v Agostini [No 2]

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Judgment (102 paragraphs)

RE WARDEN P ROTH; EX PARTE CAZALY IRON PTY LTD [2011] WASC 226 (30 August 2011)

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Cases Cited (7)