_D'Aguilar Gold Ltd v Gympie Eldorado Mining P/L_

Court of Appeal (Qld)|2007-05-18|Before: Williams, Jerrard and Holmes JJA, Separate reasons, for judgment of each member of the Court, each concurring as to the order, made

[1] WILLIAMS JA: The resolution of this appeal essentially depends upon the construction of s 158 of the Mineral Resources Act 1989 (Qld) ("the Act"). Part 5 of the Act empowers the relevant Minister to grant an exploration permit ("EPM"). The part comprehensively deals with applications for an EPM, the grounds upon which the Minister may grant an EPM, the rights conferred on the holder of an EPM, the assignment of an EPM, the protection of rights conferred by an EPM, and the rights of the holder of an EPM to enter into arrangements with others to participate in the exploration for minerals. For present purposes it is only necessary to refer in greater detail to some of those provisions.

[2] Section 151 of the Act deals with the assignment of an EPM, and relevantly for present purposes provides:

"(1) The holder of an exploration permit desirous of assigning the holder's interest in the exploration permit shall apply to the chief executive for the Minister's approval to that exercise and shall furnish to the chief executive such information with respect thereof as the Minister requires.

(4) Upon an application made pursuant to subsection (1) the Minister may cause the applicant to be given notice -

(a) that, subject to compliance with this Act in respect thereof and with any conditions specified in the notice, within 3 months from the date of the notice or such other period as is specified in the notice the Minister will approve the exercise; or

(b) that the Minister does not approve the exercise.

(5) Upon receipt within the prescribed time of the prescribed document of assignment that gives effect to an assignment referred to in subsection (1) and upon compliance with this Act and all conditions specified in the notice given pursuant to subsection (4)(a) in respect of that assignment and payment of the prescribed fee, the assignment shall be approved and such particulars as are necessary to give effect to or evidence that assignment shall be recorded in the appropriate register and endorsed on the exploration permit.

(7) An assignment of an exploration permit shall not be in respect of part only of the land the subject of the exploration permit.

(8) A purported assignment of an exploration permit or of an interest shall not be effective unless it is made in accordance with this section and approved as provided in subsection (5) and shall take effect on the day next following its approval by the Minister under subsection (5)."

[3] Section 158 of the Act impliedly empowers the holder of an EPM to enter into an "agreement, arrangement or other dealing ... in relation to" the EPM and expressly provides for the recording of that "agreement, arrangement or other dealing" in a register maintained by the chief executive. Section 158 relevantly is in the following terms:

"(1) Upon application made in the approved form, payment of the prescribed fee, and production of a document purporting to evidence an agreement, arrangement or other dealing or interest (legal or equitable) in or in relation to an exploration permit (other than an assignment of the exploration permit) to the chief executive, the chief executive shall -

(a) record in the register maintained by the chief executive, the relevant particulars set out in the application form; and

(2) The chief executive shall make the recordings prescribed by subsection (1) in the order of time in which applications are lodged with the chief executive.

(3) The chief executive is not required to examine any document produced under this section or to determine the validity of any agreement, arrangement, dealing or interest alleged in an application made under subsection (1).

(4) An agreement, arrangement, dealing or interest, particulars of which are recorded under this section shall, subject to being otherwise legally enforceable, take priority over any other agreement, arrangement, dealing or interest -

(a) particulars of which have not been recorded under this section; or

(b) particulars of which have been recorded under this section after particulars of the first mentioned agreement, arrangement, dealing or interest had been recorded.

[4] The Act also provides a caveat procedure for the protection of rights or interests in or in respect of an EPM. Relevantly s 152 of the Act provides:

"(1) A person who claims a right or interest in or in respect of an exploration permit may by a caveat in the approved form forbid the approval of any assignment in respect of the exploration permit (save any assignment the approval of which is excepted in the caveat) either absolutely or until after notice of intention to approve such an assignment is served on the caveator.

(d) specify the nature of the right or interest claimed by the caveator; and

(g) if any person consents to the lodging of the caveat, be endorsed with that person's consent; and

[5] Section 154 of the Act then goes on to provide that for so long as a caveat remains in force, the Minister shall not approve any assignment of the EPM identified in the caveat unless the assignment is specifically excepted in the caveat or the written consent of the caveator is lodged. That section also provides that where the caveat is lodged with the consent of the holder of the EPM, the caveat continues in force for the specified term referred to therein, or, if no term is specified, indefinitely. Where a caveat is lodged without consent it expires after three months unless the relevant tribunal orders otherwise.

[6] Section 153 of the Act obliges the chief executive, upon receipt of a duly lodged caveat to record its existence "in the register".

[7] It will be noted that there is a reference in both s 153 and s 158 to the obligation of the chief executive to record something "in the register". That is the register maintained pursuant to s 387 of the Act. Assignments, caveats, and dealings pursuant to s 158 with respect to an EPM are all recorded in the one register with respect to the EPM in question.

[8] On 7 September 1989 the Minister granted EPM 6031 over 50 sub-blocks of land in the Gympie region. Gympie Eldorado Gold Mines Pty Ltd ("GEGM") became the registered holder of that EPM on 17 March 1992. On 29 May 2003 GEGM entered into an agreement with D'Aguilar Gold Limited ("the appellant") pursuant to which the latter was granted rights to explore for minerals in relation to six designated sub-blocks out of the land to which EPM 6031 related. (The agreement was of much wider import, but that is the only part which is relevant for present purposes.) The chief executive was duly notified pursuant to s 158 of the Act of that agreement, and in consequence it was registered as a "farm-out agreement" on 30 September 2003 in the register kept pursuant to s 387 of the Act.

[9] On 30 December 2003 receivers and managers were appointed to GEGM, and it was placed into liquidation on 28 July 2004.

[10] Subsequently it was proposed that GEGM would sell (assign) EPM 6031 to Gympie Eldorado Mining Pty Ltd ("the respondent'). Prior to settlement of that transaction GEGM raised with the appellant the possibility of a novation of the farm-out agreement. Those negotiations for a novation did not come to fruition.

[11] At no stage, either before or after it became aware of the proposal by GEGM to sell the EPM in question to the respondent, did the appellant lodge a caveat under s 152 of the Act seeking to prevent that assignment or take other steps at law to prevent the sale from proceeding. An application to have that assignment approved was made to the chief executive pursuant to s 151(1) of the Act on 10 September 2004 and ultimately the respondent became the registered holder of EPM 6031 on 14 January 2005.

[12] A dispute then arose between the parties; the appellant contended that the respondent acquired EPM 6031 subject to its rights under the farm-out agreement but that was denied by the respondent. The appellant then on 14 December 2005 lodged a caveat over EPM 6031 seeking to protect the interest it claimed.

[13] It is the appellant's contention that upon the proper construction of s 158 of the Act its interest under the farm-out agreement takes priority over the assignment; in other words the assignment would take effect subject to the farm-out agreement. That, the appellant says, is the consequence of the construction of s 158(4) for which it contends.

[14] Before proceeding further it should be noted that initially the appellant contended that it had some equitable interest in EPM 6031 in consequence of the farm-out agreement and that the respondent took the assignment subject to that equity. That is no longer a contention of the appellant. It is conceded that it has no equitable interest in EPM 6031, and that its rights pursuant to the farm-out agreement are contractual rights only. There was acceptance before this Court, as indeed there had to be, of the conclusion by the learned judge at first instance that no equitable interest in the sub-blocks the subject of the farm-out agreement could or did arise in favour of the appellant. The argument before this Court proceeded on the basis that the appellant had no proprietary interest, legal or equitable, in the EPM.

[15] It follows that unless the farm-out agreement is protected by operation of s 158 it is not enforceable against the respondent.

[16] Prima facie the submission on behalf of the appellant is simple. The farm-out agreement in question has been recorded under s 158(4) and, as then provided by that subsection, it takes priority over any other agreement which has not been registered or recorded under s 158. The assignment to the respondent has not been registered or recorded under s 158, and in consequence the farm-out agreement has priority; in other words the respondent takes the assignment subject to the farm-out agreement.

[17] The question for determination by this Court is whether or not that is the proper construction of the provision. It becomes necessary to analyse the whole of s 158 in some detail.

[18] The pivotal provision is that found in subsection (1) providing for registration. What can be recorded in the register is "an agreement, arrangement or other dealing or interest (legal or equitable) in or in relation to an exploration permit (other than an assignment of the exploration permit)". In other words the focus of the section is on (broadly speaking) an agreement or dealing in relation to an EPM other than an assignment of it.

[19] The next relevant provision is subsection (3). It provides that the chief executive is not required to determine the validity of "any agreement, arrangement, dealing or interest alleged in an application made under subsection (1)." That must be a reference to an agreement or dealing with the EPM which may be registered under subsection (1). Clearly the quoted words from subsection (3) do not include an agreement for the assignment of an EPM.

[20] Then comes subsection (4). By way of introduction the subsection refers to an "agreement, arrangement, dealing or interest, particulars of which are recorded under this section". As an agreement for an assignment of an EPM cannot be recorded under subsection (1), those introductory words cannot encompass an agreement for the assignment of an EPM.

[21] Then the subsection says that a recorded dealing takes priority over "any other agreement, arrangement, dealing or interest ... particulars of which have not been recorded under this section." It is the contention of the appellant that those words are of wide, almost unlimited, import, and in consequence encompass or include an agreement for the assignment of the EPM. I will return to that contention in a moment.

[22] Subsection (4)(b) also refers to the "first mentioned agreement, arrangement, dealing or interest" which has been recorded. Again, if only because of the reference to "recorded", an agreement for the assignment of an EPM would not be encompassed by those words.

[23] Thus it can be seen that on five occasions in s 158 the words "agreement, arrangement, dealing or interest" are used, and on four of those occasions it is clear that the words do not encompass an agreement for the assignment of an EPM. The question is whether the words should, as contended for by the appellant, have a different meaning when used on the second occasion in s 158(4).

[24] Clearly when the words "agreement, arrangement, dealing or interest" are used on each occasion in subsections (3) and (4) there has to be implied the limitation found in subsection (1) that the agreement or dealing be "in relation to an exploration permit", and also the words expanding the legal nature of the interest so that legal and equitable interests were included. At least to that extent when used on the later occasions in the section, the words in question are to be read as governed by matters found in subsection (1). The expression used in subsections (3) and (4) is in essence a shorthand way of referring to the introductory words found in subsection (1). If that is the correct analysis why should the expression used on the second occasion in subsection (4) not also involve the exclusion of an assignment of an EPM.

[25] Senior counsel for the appellant sought to draw comfort from the fact that there was express reference in subsections (2) and (3) back to subsection (1). Though that indicates careful drafting it does not add strength to the submission on behalf of the appellant. In subsection (2) the reference back demonstrates which "recordings" are being referred to. In subsection (3) the reference to subsection (1) defines the "application" in question. In neither case does the reference back directly affect the meaning to be attributed to the words "any agreement, arrangement, dealing or interest". Continuing the submission that the section was carefully drafted, senior counsel referred to the fact that on the first and third occasions the expression was used in subsection (4) the use of the term "recorded" made it clear that only dealings which could be recorded were being referred to. So much is obvious. But the central plank of the submission is that the absence of a reference back to subsection (1) or the use of the term "recorded" when the expression is used for the second time in subsection (4) must mean that something different was intended. But the argument loses substance once it is appreciated that on this occasion one is concerned with a dealing which has not been recorded. As an assignment of an EPM cannot be recorded prima facie the words must be referring to a dealing which could have been recorded but has not been.

[26] Although there are judicial statements indicating there is no such rule of general application, it has been said that there is a "presumption in construction that the same words are used in the same meaning in the same statute" (see Odgers, The Construction of Deeds and Statutes (4th ed, 1956), p 184). Baron Cleasby said as much in Courtauld v Legh (1869) LR 4 Exch 126 at 130: "...it is a sound rule of construction to give the same meaning to the same words occurring in different parts of an act [sic] of parliament or other document." To similar effect is an observation by Lindley MR In re Birks; Kenyon v Birks [1900] 1 Ch 417 at 418, though he was speaking of a will not a statute:

"The word 'issue' is said to have a flexible meaning - it may mean 'children', or it may mean descendants of any degree. There is no hard and fast rule, and what we have to discover is the sense in which this testator has used the word in this will. He has used the word so often that we cannot help seeing his meaning. In eleven cases out of twelve we can see that he means by 'issue' simply 'children'. If, then, we find it to be clear, in eleven out of twelve cases, that in using the word 'issue' he means 'children', what is the natural inference to be drawn in the twelfth case, where he has thrown no light upon the meaning of the word? The natural conclusion is that he uses the word in the same sense in which he has used it before. That is good sense. I do not know whether it is law, or a canon of construction, but it is good sense to say that whenever in a deed, or will, or other document, you find that a word used in one part of it has some clear and definite meaning, then the presumption is that it is intended to mean the same thing where, when used in another part of the document, its meaning is not clear."

[27] The reasoning in each of the preceding three paragraphs of these reasons alone would be sufficient to lead to the conclusion that the submission for the appellant must be rejected, but any doubt is removed by the combined reasoning in those paragraphs.

[28] Such a conclusion does not lead to an unjust or absurd result, and is in keeping with the general purpose of the statute. Section 158 is primarily, if not solely, concerned with establishing priority as between subsidiary interests created after an EPM has been granted; the priority of those interests will be determined by the order in which they are registered. Recording does not give any additional efficacy to the agreement. Section 158 does not deal with assignments of an EPM as such. An EPM can only be assigned with the consent of the Minister obtained in accordance with the requirements of s 151; it is that section which gives legal effect to an assignment. The holder of an EPM or the holder of a subsidiary interest in an EPM may protect that interest by lodging a caveat pursuant to s 152 forbidding approval of an assignment which would defeat the caveator's interest. The caveat provisions are designed to afford protection to holders of interests as distinct from establishing priority as between the holders of subsidiary interests. Ordinarily the grantee of an interest from the holder of an EPM would be able to obtain the consent of the holder of the EPM to the lodging of a caveat, thereby protecting the subsidiary interest for its duration.

[29] The caveat procedure provides adequate protection against fraudulent dealings with an EPM or an interest in an EPM; the lodging of a caveat can clearly prevent an assignment of an EPM.

[30] Senior counsel for the appellant submitted, by referring to the position under the Torrens system of land title, that a caveat was primarily concerned with the protection of rights pending registration. Whilst that might generally be so under the Torrens system, it does not mean that the caveat regime under this Act is so limited. The wording of the sections dealing with caveats in this Act clearly indicate that wider protection is afforded than mere protection until registration under s 158.

[31] Senior counsel for the appellant also sought to overcome the difficulties he faced by submitting that the holder of an EPM could only assign what had not been "carved out" and made the subject of a dealing registered pursuant to s 158. The difficulty with that argument is that nothing is "carved out" of an EPM unless the grantee of the interest obtains some proprietary right in the EPM. Here, as conceded, the appellant only has contractual rights, rather than proprietary rights, with respect to the EPM. It follows, at least in this case, that nothing has been "carved out" and GEGM as the holder of the EPM was thus entitled to assign the whole of it.

[32] Senior counsel for the respondent provided two practical examples of situations confirming the reasonableness of construing s 158(4)(a) as having no relevance where an assignment of an EPM was involved.

[33] Assume that A is the holder of an EPM and by agreement confers on B limited rights with respect to that EPM, but B does not register that agreement pursuant to s 158. C then enters into negotiations with A to acquire the EPM and on searching the register is not made aware of B's interest, and on that basis C acquires the EPM. What is the position if subsequently B has its interest recorded pursuant to s 158. As the assignment to C could not be registered, on the appellant's argument the later registration by B would give it priority over C. That could not have been the intention of parliament.

[34] Further, assume A is the holder of an EPM and has negotiated an assignment of it to C. Steps are then taken pursuant to s 151 with a view to obtaining in due course ministerial approval for the assignment. Whilst that process is underway A, with intent to obtain a benefit fraudulently, enters into an agreement with an associate B, conferring on B rights in relation to the EPM. If B then procured the recording in the register of that agreement pursuant to s 158 before or after the Minister approved the assignment to C, on the appellant's argument B's rights would have priority over the assignee C. Again that could not have been the intention of the legislature.

[35] The appellant could have protected its position pursuant to the agreement of 29 May 2003 by lodging, with the consent of GEGM, a caveat pursuant to s 152 of the Act. It failed to do so, and the contractual rights it obtained under the agreement do not have priority by operation of s 158 over the assignment of the EPM to the respondent.

[36] It follows that the appeal should be dismissed with costs.

[37] JERRARD JA: I have read the judgment of Williams JA and agree with His Honour's reasons and orders.

[38] HOLMES JA: I agree with the reasons of Williams JA and the order he proposes.

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