MATTER : The Mining Act 1978

Plaint 9/956 for forfeiture of mining lease 53/234 held by Plutonic Operations Ltd and plaint 10/956 for forfeiture of mining lease 53/233 held by Plutonic Operations Ltd and Sipa Resources Ltd

An application for a Writ of Mandamus and a Writ of Certiorari directed to The Minister for Mines (The Honourable Norman Moore) exercising jurisdiction pursuant to the Mining Act 1978 in respect of the abovementioned plaints for forfeiture

Administrative law - Prerogative writs - Certiorari and Mandamus - Decision of Minister to grant expenditure exemptions to mining tenement holders pursuant to Mining Act 1978 - Jurisdictional error of law

Administrative law - Jurisdictional error - Improper delegation of power - Minister erred in adopting decision of improperly delegated person - Absent proper delegation Minister required to consider matter personally

Administrative law - Jurisdictional error - Failure to afford due process - Party opposing exemption not given opportunity of responding to materials upon which Minister acted - No opportunity to respond to submission to Minister by applicant for exemption

Administrative law - Jurisdictional error - Failure to take relevant considerations into account - Reliance on erroneous advice - Failure to consider intention of Act to ensure mining land available for exploitation - Application of subjective test whether tenement was economically viable for present holder rather than objective test of viability as stand alone tenement for any holder

Nova Resources (1995) 12 WAR 50, applied

Re Minister for Mines; Ex parte Roberts (1997) 18WAR 408, applied

Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, applied

Mining Act 1978 (WA), s 82, s 98, s 99, s 100, s 102

Mining Regulations 1981

Sipa Resources Ltd : Mr M J Buss QC & Mr M T McKenna

1 MALCOLM CJ: This is the return of an order nisi made by Templeman J on 4 September 1998 by which it was ordered that the Minister for Mines, the Honourable Norman Moore MLC ("the Minister") exercising jurisdiction under the Mining Act 1978 (WA) ("the Act") in respect of plaints for forfeiture 9 and 10/956 in respect of mining leases ML 53/234 and ML 53/233 show cause why a writ of mandamus and a writ of certiorari should not issue:

"... quashing the decision of the Minister made on or about 28 April 1998 and requiring the Minister to determine those plaints according to law."

2 Alternatively, the applicant sought a declaration that the Minister's decision was invalid and of no effect. The relief by way of mandamus and certiorari was sought on some 11 grounds.

3 This is the second time that the parties to these proceedings have been before the Full Court. On 4 December 1997 this Court ordered that an order nisi made on 9 June 1997 by which the Minister was ordered to show cause why a writ of certiorari and a writ of mandamus should not to remove into this Court for the purpose of being quashed the decision of the Minister in respect of plaints of forfeiture 9 and 10/956 in respect of mining leases ML 52/233 and ML 52/234 and to direct the Minister to determine those plaints according to law.

4 ML 53/233 is held by Plutonic Operations Ltd ("Plutonic") and Sipa Resources Ltd ("Sipa") (referred to jointly as "the respondents"). ML 53/234 is held by Plutonic. Pursuant to s 82(1)(c) of the Act and reg 31(1) of the Mining Regulations 1981 (WA) ("the Regulations"), the leases were subject to an annual expenditure requirement of $100,000 for each year since the date of their grant up to and including the year ended 11 August 1995. Exemptions in respect of almost the whole of the required expenditure were granted under s 102 of the Act in respect of each of the years preceding that ended on 11 August 1995.

5 In the year ended 11 August 1995, $395 was expended on ML 53/233 and $46 on ML 53/234. Applications for exemption in respect of that year were required to be lodged within 60 days of 11 August 1995 under s 102(1) of the Act and reg 54(1)(a) of the Regulations. The holders of each of the leases lodged applications for exemption on 9 October 1995. The exemptions sought were expressed to be under s 102(3) of the Act, which deals with exemptions for reasons other than those specified in s 102(2), but the supporting statutory declarations required by reg 54(3) raised a ground of exemption provided for by s 102(2)(e), namely:

"That the ground the subject of the mining tenement contains a mineral deposit which is uneconomic but which may reasonably be expected to become economic in the future or that at the relevant time economic or marketing problems are such as not to make the mining operations viable."

6 On 13 December 1995 the applicant, Mr Roberts, filed plaints for forfeiture of each of the tenements. He did so under s 98(1) of the Act on the ground, in each case, that the expenditure conditions for the year ended 11 August 1995 had not been satisfied. It was then too late for him to object to the exemption applications by virtue of the provisions of reg 55 which, at that time, made no provision for an extension of time within which to make such an objection. However, the Department of Minerals and Energy ("the Department") decided, notwithstanding the grounds implicitly based on s 102(2)(e) in the submissions and dealt with in the supporting statutory declarations by the tenement holders, that the applications for exemption having been made expressly under s 102(3) only, the Minister or his delegate could not grant an exemption upon the ground provided for by s 102(2)(e). The exemption applications were refused on 22 August 1996.

7 The applicant's plaints for forfeiture were heard by the Mining Warden on 10 October 1996. On 27 November 1996 the learned Warden recommended forfeiture of each of the tenements. At the hearing of the plaints, Plutonic and Sipa had contended that, on the evidence before him, the Warden could not be satisfied that the non-compliance with the expenditure conditions was of sufficient gravity to justify forfeiture. They submitted that the circumstances surrounding the unsuccessful exemption application were both relevant and admissible. However, the learned Warden said that he could not be persuaded to exercise his discretion on the basis that the exemption application may have been successful, had it not been for the mistake in bringing the application under the wrong section. Delivering his decision the learned Warden said that:

"The policy of the Act dictates that land is available for exploration and tenement holders cannot rely upon the exemption process as a retention mechanism with compliance of [sic with] expenditure requirements dependent upon priorities within the respective organisations."

8 Following a review of the evidence, the learned Warden said:

"In these matters the defendants have held the land for a period of three years having made minimal expenditure over that period. They have no plans for the future and are simply holding the land pending a change in circumstances that may bring the two tenements within the list of priorities within their overall organisations. Their actions have been calculated and deliberate. These are not matters of misinterpretation, mistaken calculation or oversight. Evidence has been produced suggesting that a smaller operation or an operation organised in a different manner by different methods could viably mine the tenements in question and be economically viable. The defendants chose not to explore that available avenue if in fact they had ever contemplated such a decision.

If a tenement holder is not willing to comply with the privilege attached to the holding of such leases and the requirements inexorably attached thereto they should not be permitted to hold that privilege. Parliament imposed conditions upon the retention of tenements and there must be strict compliance with those provisions.

Tenement holders cannot advance the economic viability argument without exhaustive attempts to realise the potential of the land. That is not to say that a tenement holder must explore every portion of the holding. However, a lessee cannot retain land without prospective planning and strategies being considered. There must be a proactive stance and attempts to find alternatives, not mere reticence.

For these reasons I am satisfied that the defendant's failure in each of these instances to comply with the statutory expenditure requirements is of such sufficient gravity that forfeiture should be recommended and that an order be made in terms of the plaints."

9 Section 98(6) of the Act provides that:

"As soon as practicable after the hearing of the application the Warden shall forward to the Minister the notes of evidence, with a report and the Warden's recommendation, if any, on the application and the Minister may, before acting on the recommendation, require the Warden to take such further evidence or re-hear the application as the Minister directs."

10 The Warden's reasons, the transcript of the hearing, the court documents and (presumably) the exhibits were then forwarded to the Minister. The tenement holders then made written submissions to the Minister under cover of a letter dated 20 December 1996 in an attempt to persuade him to "rule against the Warden's recommendations for forfeiture of the tenements" in the exercise of the discretion afforded him by s 99(1) of the Act, which provides that:

"The Minister, after receiving the recommendation of the Warden as provided in section 98, may, as the Minister thinks fit -

(a) declare the exploration licence or the lease to which the recommendation relates, forfeited;

(b) impose a penalty not exceeding $5000 as an alternative to forfeiture;

(c) award the whole amount of the penalty or any part thereof to the applicant who applied for forfeiture; or

(d) determine not to forfeit such licence or lease or impose any penalty."

11 The tenement holders' submissions were passed on to the Department by the Minister.

12 An internal memorandum prepared by an officer of the Department and dated 6 January 1997 recorded an agreement that the matter be referred to the Director of Geological Survey for comments regarding what was referred to as:

"The uneconomic factor - would the leases be capable of a 'stand-alone' operation for an individual."

This was on the basis that forfeiture would be recommended if "stand-alone" was agreed, but if not agreed, it would be recommended that there be a fine of $1000 on each lease to be paid to the applicant.

13 On 7 January 1997 a memorandum was sent by the Senior Monitoring Officer for the Director, Mineral Titles to the Director of Geological Survey setting out the background and pointing out that:

"The uneconomic factor has been used as grounds for exemption since these leases were granted in 1992. Before any recommendation is made to the Minister, please comment on whether the resource identified as being uneconomic would be sufficiently viable for an individual to establish a 'stand-alone' operation?"

14 The Director, Geological Survey replied to that memorandum by a memorandum dated 23 January 1997. He said:

"The Geological Survey is generally not in a position to determine whether a particular deposit might be economically viable. It is up to the mining company, through a feasibility study, to make such a determination.

For the purpose of exemption under 102(2)(e), we would ascertain that a deposit had been defined to an acceptable standard (JORG code) and that all the relevant data had been submitted to the Department. In this particular case, we would have had no objections to exemptions being granted under 102(2)(e).

From the limited information available to me, I see no reason to doubt Plutonic's assessment that exploitation of the deposits is currently not a viable option for the company. The tenements contain a number of small deposits which occur within shear zones in a narrow greenstone belt. Metallurgical tests have shown that the ore is not amenable to heat bleaching and Plutonic's nearest processing facilities are at Bellevue about 100 km away.

In the context of this case, forfeiture would seem very harsh, taking in account the reasons the exemptions were refused and the fact that the companies have spent a considerable amount of money in the past (albeit not on the current title) to prove up the resources."

15 Subsequently the Director-General of the Department sent to the Minister a memorandum of advice dated 25 March 1997 annexing letters to be sent to the respondents by the Minister if he approved the advice. The memorandum set out briefly the background to the forfeiture applications and the applications for exemption, and furnished a summary of what were referred to as "the main points of evidence given for the defendant and referred to by the Warden in his reasons for decision". The memorandum also provided a brief summary of the Warden's reasons for his recommendation and went on to deal with the comments of the Director, Geological Survey. The memorandum also said:

" Pursuant to Section 99(1) after receiving the Warden's recommendation you may as you think fit:

(b) determine not to forfeit or impose any penalty; or

(c) impose a penalty not exceeding $5000 as an alternative to forfeiture.

You may also award the whole or any part of the penalty to the plaintiff.

10. Notwithstanding the Warden's recommendation for forfeiture, an uneconomic orebody is a reason for which exemption can be applied for and granted. The lessees have submitted that the resource it has defined is currently uneconomic. The exemption provisions are designed to protect title holders in such circumstances and I consider that in this case forfeiture of the leases is not warranted.

11. I recommend that a fine of $1000 per lease ($2000 total) be imposed in lieu of forfeiture with half of this amount being payable to the plaintiff. The plaints would not have even arisen if the lessee had made proper formal exemption applications and in all the circumstances I consider a monetary penalty is appropriate and that the plaintiff should receive half of this amount to help cover his expenses. It should also be noted that where a monetary penalty is not paid within 30 days of imposition, Section 99(3) provides that the lease be forfeited with preferential pegging rights being given to the plaintiff.

12. Should you agree with my recommendations, I have prepared suggested letters to each of the parties for your consideration."

16 That memorandum was stamped as having been approved by the Minister on 26 March 1997. On the same day the Minister sent out the letters which had been drafted by the Department informing the parties of his decision to uphold the plaints but to impose fines in lieu of forfeiture.

17 At no time was the applicant told of the contents of the submissions which had been made to the Minister on behalf of the tenement holders, or himself given any opportunity to make any further submissions. Nor was he kept informed of any part of the decision-making process, including the reference to and the response from the Director, Geological Survey. He was simply told that the Minister had decided that the tenements should not be forfeited.

18 When forfeiture is ordered, the applicant for forfeiture has, by virtue of s 100(2) of the Act, a period of 14 days after the date of publication of the notice of forfeiture, in priority to any other person, to mark out or apply for or both, a mining tenement upon the whole or any part of the land that was the subject of the forfeited lease. The decision of the Minister had the effect of depriving the applicant of that benefit. In these circumstances, it was held by this Court that the Minister was obliged to proceed, so far as the applicant was concerned, in accordance with the rules of procedural fairness as appropriate and adapted to the circumstances of the case: see Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 582-583; and the other cases referred to in Re Minister for Mines; Ex parte Roberts (1997) 18 WAR 408 at 416-417 per Steytler J (with whom Malcolm CJ and Kennedy J agreed). It followed that once the Minister elected to receive submissions from the tenement holders, he was obliged as a matter of procedural fairness to afford the applicant the opportunity to answer those submissions: cf Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 46 per Mason J; and at 60 per Brennan J.

19 It was also held that the Minister should not have obtained further evidence from the Director, Geological Survey without affording to the applicant the opportunity to answer, or at least comment on that evidence. As Steytler J said in Re Minister for Mines; Ex parte Roberts at 418:

"Were the position otherwise the whole procedure of a full adversary hearing before the Warden pursuant to the lodging of the plaints by the applicant could effectively be set at nought. It is no doubt for that very reason that the legislature has seen fit to give to the Minister the power to require the Warden to take further evidence or even re-hear the application when appropriate.

That is not to say, of course, that the Minister can never have the benefit of submissions which were not before the Warden, or take into account evidence which was not placed before the Warden, without sending the matter back to the Warden. However, where those new submissions, or that new evidence, might lead to or materially influence the exercise by the Minister of a discretion adverse to one of the interested parties (as seems to me plainly to have been the situation in this case, in which the Minister was persuaded not to adopt the Warden's recommendation) then he must, at least, give to the affected person the opportunity to be heard in respect of those submissions or that evidence."

20 In that case the Minister had not done so. Consequently, the Court ordered that the writ of certiorari issue on the basis that the decision of the Minister be quashed upon the return without further order, and that the writ of mandamus should be peremptory in accordance with O 56 r 23 and expressed in an order of the Court without the issue of the writ in accordance with O 56 r 28 of the Rules of the Supreme Court 1971.

21 The material now before this Court shows that each of the two subject mining leases had an annual expenditure requirement of $100,000 for the year ended 11 August 1995 and each of the previous years since the grant of the mining leases in August 1992. As at August 1995 there had been virtually total exemptions granted for each tenement in the two previous tenement years going back to the grant of the two tenements in August 1992. The two tenements replaced others held by the same parties who had in fact spent minimal amounts on the ground comprised in them since 1989. The submission by the applicant to the Minister showed that ML 53/233 was granted following the surrender of previous tenements, including the area covered by ML 53/233. The expenditure shortfall on the relevant tenements since 1989 was very substantial. In respect of ML 53/233 the expenditure claimed was $116,270, in respect of which exemptions amounting to $1,254,372 had been granted involving an expenditure shortfall of $1,466,470. In respect of ML 53/234, this was granted following the surrender of earlier tenements including the area covered by ML 53/234. The expenditure shortfall and exemption history of ML 53/234 since 1989 showed that expenditure claimed was $111,793, exemptions granted amounted to $675,926 involving an expenditure shortfall of $792,353.

22 The applicant also referred to the fact that the Director, Geological Survey said in his memorandum of 23 January 1997:

"... there is no reason to doubt Plutonic's assessment that the exploitation of the deposits is currently not a viable option for the company."

23 The Director, Geological Survey said he was not able to answer the question whether the exploitation of the deposits would have been economically viable (as a stand-alone) for anyone else, which was in fact the question he was asked and to which he purported to reply. It was submitted by the applicant that:

"This is one of the real questions which must be considered in determining this matter. The other is whether further exploration (bearing in mind that 'mining' is referred to in section 8 of the Act to include exploration) on the tenement is warranted."

24 The Director, Geological Survey also said in his memorandum that:

"He would have had no objections to exemptions being granted under s 102(2)(e)."

25 As was pointed out by counsel for the applicant, the Director did not have before him the transcript of evidence before the Warden or his reasons for decision. Had he had those documents before him he would have seen the evidence of Dr Ruddock, who had the function within the Department of making recommendations to the Minister whether exemption applications should be granted. In this case Dr Ruddock did not go back and examine the expenditure history on the previous tenements covering the same area as the subject tenements. He said he was told by both Mr Hitchcocks and Mr Bucknall of Plutonic that they had been using their best endeavours to try to come to some solution about when they would start activities in relation to production from those tenements. Both Mr Hitchcocks and Mr Bucknall denied in evidence they had any such conversation with Dr Ruddock.

26 It was submitted by the applicant that the evidence of Dr Ruddock was based upon three fundamental flaws. First, he thought that the tenement holders had intentions to commence production from the tenements, which they did not. Secondly, he had only gone back through the history of expenditure on the ground the subject of the tenements for the three years since the present leases were granted. Had he gone back further he would have ascertained that the last expenditure by the tenement holders on the ground the subject of those tenements was in 1989. Thirdly, his interpretation of s 102 was contrary to the decision of this Court regarding the purpose of the relevant provisions in Nova Resources NL v French (1995) 12 WAR 50.

27 The procedure adopted by the Minister after the previous decision of the Full Court appears to have been as follows. Plutonic's solicitors made a submission to the Department to be put before the Minister on 23 December 1997 to the effect that the Minister's previous decision was incorrect only because of his failure to accord procedural fairness, by not giving the applicant a copy of the submissions made on behalf of Plutonic and Sipa. On 28 January 1998 the Minister sent to the applicant's solicitors a copy of these submissions, a copy of previous submissions made by Plutonic prior to the Minister's decision on 26 March 1997 and the report from the Director, Geological Survey dated 23 January 1997, which had been prepared prior to and used in the previous decision by the Minister. The applicant's solicitors then made written submissions to the Minister by letter dated 24 February 1998. A memorandum on behalf of the Director-General dated 22 April 1998 was then sent to the Minister. It appears to have annexed draft letters to be sent to the parties, if the Minister approved their contents. The memorandum said:

"It should be noted that the plaints would not have arisen if the lessee had made proper formal exemption applications, quoting the correct section of the Act."

"An exemption on uneconomic grounds must be considered in terms of the holder's claim and cannot take into consideration whether the same 'uneconomic' deposit could be mined by another individual."

28 That memorandum bears a stamp "Approved, Minister for Mines 28/4/98". The letters to the parties informing them of the Minister's decision were sent the next day.

29 As with the case on the previous occasion, Mr Roberts was not given an opportunity to comment upon the Director's recommendation to the Minister, which was again based upon the assertion that the Department would have granted the exemption applications, if they had been made under the right section of the Act. The recommendation was also based on an interpretation of s102(2)(e) of the Act which was different from that of the Warden.

Grounds (a) and (b): Improper Delegation of Power and Jurisdictional Error

30 Grounds (a) and (b) of the order nisi were that:

"(a) The Minister did not personally make any decision pursuant to s 99 of the Act but simply adopted a decision made by officers of the Department of Minerals and Energy. There was no relevant delegation of the Minister's power pursuant to s 12 of the Act.

Alternatively, if the Minister personally made a decision, then:

(b) The Minister was not personally provided with and/or did not consider the materials required by s 98(6) of the Act to be forwarded to him."

31 It was submitted that the Minister simply approved a decision made for him by someone who prepared the memorandum dated 22 April 1998 on behalf of the Director-General of Mines. Section 12 of the Act contains an express power to delegate the Minister's functions under the Act, but that power was not used in the present case. Sections 58 and 59 of the Interpretation Act 1984 (WA) may have assisted had there been a delegation under s 12 of the Act. It was submitted that the Minister himself was required to personally consider these matters rather than simply adopt a decision or a recommendation made by some other person.

32 As has been seen, s 98(6) of the Act requires the Warden to forward to the Minister "the notes of evidence, with a report and the Warden's recommendation, if any, on the application". The evidence and documents before this Court implies or leads to the inference that the Warden's notes of evidence in the form of the transcript of the hearing before the Warden, the exhibits and the Warden's reasons and recommendations as contained in his report were not themselves considered by the Minister in making a decision. They were not referred to, other than in passing, in the Director-General's memorandum, which appears to have been the basis of his decision.

33 The Minister for Mines has considerable responsibility under the Act. Ministers and other authorities may delegate their powers to officials acting within their delegated authority. This special rule is known as the "Carltona principle" which is derived from the decision of the Court of Appeal in Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 in which Lord Greene MR said at 563:

"It cannot be supposed that this regulation meant that, in each case, the minister in person should direct his mind to the matter. The duties imposed upon ministers and the powers given to ministers are normally exercised under the authority of the ministers by responsible officials of the department. Public business could not be carried on if that were not the case. Constitutionally, the decision of such an official is, of course, the decision of the minister. The minister is responsible. It is he who must answer before Parliament for anything that his officials have done under his authority."

34 The context of the Carltona principle was that many ministerial powers are exercised by officials who recite, "I am directed by the Minister", "the Minister is of opinion" and so on, when in reality the official is acting on his or her own initiative. If the proper official is acting in his capacity as such, the assumption of ministerial authority will be lawful: Lewisham Borough Council v Roberts [1949] 2 KB 608; Woollett v Minister of Agriculture and Fisheries [1955] 1 QB 103; and R v Skinner [1968] 2 QB 700.

35 It was submitted, however, by counsel for the applicant that the Carltona principle would probably apply to allow an officer of the Minister's department to make a decision for him, were it not for the existence of the express power of delegation in s 12 of the Act in conjunction with s 58 and s 59 of the Interpretation Act 1984: Commissioners of Customs and Excise v Cure & Deeley Pty Ltd [1962] 1 QB 340 at 371-372; and Kanthal Australia Pty Ltd v Minister for Industry, Technology and Commerce, unreported; Fed Ct; 23 November 1997; pars 37-40 per Willcox J. In this case, there is no evidence of any such delegation. As Murray J (with whom Malcolm CJ and Franklyn J agreed) said in Wardley Australia Ltd v Attorney General (1991) 5 WAR 453 at 456:

"There is no evidence before the Court of any such act of delegation, either generally or in either specific case. The alter ego principle, by which a minister may act in respect of his administrative functions without delegation but through a duly authorised agent, may be a difficult one to apply in any given case having regard to the nature of the statutory scheme, the proper interpretation of relevant provisions and all the circumstances although the principle is clear enough."

See also Minister for Aboriginal Affairs v Peko-Wallsend at 38 per Mason J.

36 The Minister has a wide range of powers under the Act: see Minister for Mines, Fuel and Energy; Ex parte Trythall (1992) 7 WAR 375. It is necessary to determine with respect to each of such powers whether it must be exercised personally, in the absence of a delegation under s 12, or whether it is one of those which departmental officers may exercise on the Minister's behalf. The power of the Minister under s 99 of the Act is a very important one. As with the power of deciding an appeal the subject of Trythall, the power under s 99 may involve policy considerations above and beyond matters necessarily considered by the Warden in arriving at his recommendation or decision. Although s 99 refers to the Minister "receiving" rather than "considering" that recommendation, it is necessarily to be implied that the Minister himself will consider the Warden's recommendation: Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 170-173 per Brennan CJ, Gaudron and Gummow JJ. It is clear from that decision that the Minister would be required to consider the Warden's recommendation. Thus, while the Minister had the power to delegate under s 12 of the Act, he did not do so. Absent such a delegation he was required personally to take into account the Warden's recommendation. In this case he was unable to do so because the recommendation was not before him. Although it was open to him to delegate his power and responsibility under s 12 he did not do so. He appears to have made the decision personally, but upon the basis of the memorandum sent to him on behalf of the Director-General of Mines. He did not himself see or have regard to the documents which were required to be sent to him and, by implication, to which he was required to have regard pursuant to s 98(6) and s 99 of the Act, before he could make a valid decision. In these circumstances, I consider that grounds (a) and (b) have been made out.

Grounds (c), (d) and (e): Denial of Procedural Fairness

"(c) The Minister denied the applicant procedural fairness in that he obtained advice dated 22 April 1998 from the office of the Director of Mines and considered and based his decision upon that advice without:

(i) informing the applicant that he had received that advice;

(ii) providing the applicant with a copy of that advice;

(iii) giving the applicant any opportunity to comment upon that advice; or

(iv) referring the matter back to the Warden pursuant to s 98(6) of the Act for the taking of further evidence or for re-hearing.

(d) The Minister, in arriving at his decision and having considered evidence which was not before the Warden in particular evidence from the Director General of Mines that 'the plaints would not have arisen if the lessee had made proper formal exemption applications, quoting the correct section of the Act', failed to consider whether he should have required the Warden to take further evidence or re-hear the application pursuant to s 98(6) of the Act.

(e) In the circumstances of the case i.e. when the Minister had decided not to follow the recommendation of the Warden, the applicant was denied procedural fairness in that:-

(i) he was not given notice of that fact prior to the Minister making a decision;

(ii) he was not given notice of the Minister's reasons prior to the Minister making a decision;

(iii) he was given no opportunity to make submissions or otherwise be heard prior to the Minister making a decision;

(iv) the Minister did not refer the matter back to the Warden for the taking of further evidence prior to making a decision."

38 It was submitted that the Minister denied the applicant procedural fairness by not giving him access to the material upon which he based his decision. Consequently, the decision was infected by the same vice as his earlier decision the subject of Re Minister for Mines; Ex parte Roberts, above, at 415-419 per Steytler J.

39 The report to the Minister, which was adopted by him, was based upon the "fact" that the tenement holders would have obtained an exemption from the Department (on behalf of the Minister) had the applicant not applied under the wrong legislative provision. It was also based upon the premise that:

"If a lessee has spent a substantial amount to delineate and define an ore reserve, it is reasonable for the company to expect that it should be able to recover some of that expense through the joint venturing or an external sale of those tenements if it considers the resource uneconomic for its purposes. It then follows that the Director, Geological Survey should only be expected to determine if the resource is proven uneconomic to that operator who holds the ground."

40 Mr Roberts was given no opportunity to comment on the adoption of this policy approach to the interpretation and application of the Act by the Department. The applicant endeavoured to protect his position by making submissions in advance in an effort to avoid the Minister making this error. Whether those submissions were put before the Minister does not appear. If they were they appear to have been disregarded. If they were not they were obviously disregarded. In either case there has been a failure to take into account a relevant consideration. This point is of more relevance in relation to grounds (f) to (k). In any event, it is implicit from the Minister's decision that the memorandum from the Director-General was considered by the Minister in making his decision. Consequently, it was material in respect of which Mr Roberts should have been given the opportunity to comment and make submissions upon. In my opinion, grounds (c), (d) and (e) have been made out.

Grounds (f) to (k): Relevant and Irrelevant Considerations

41 Grounds (f) to (k) of the order nisi were as follows:

"(f) The Minister, in arriving at his decision, failed to consider the objects and aims of the Act and in particular the primary object relevant to plaints for forfeiture 'to ensure as far as practicable that land which has either known potential for mining or is worthy of exploration will be made available for mining or exploration' per Rowland J in Nova Resources NL v French (1995) 12 WAR 50 at 57.

(g) The Minister, in arriving at his decision failed to consider the evidence heard by the Warden and the fact that the Warden had heard evidence relevant to the question of whether or not the tenement holders would have been entitled to obtain an exemption pursuant to s 102(2)(e) of the Act from the expenditure requirements imposed by the Act upon them.

(h) The Minister, had he considered the record of the evidence heard by the Warden could not reasonably have come to the conclusion that the tenement holders could have obtained an exemption pursuant to s 102(2)(e) of the Act from the expenditure requirements imposed by the Act upon them.

(i) The Minister erred in applying a subjective test rather than an objective test in his construction of s 102(2)(e) of the Act in that in arriving at his decision he considered the question of whether the resource on the tenements was uneconomic for the tenement holders to mine and not whether it was generally uneconomic to mine.

(j) The Minister erred by wrongly considering that had the tenement holders sought exemption under s 102(2)(e) of the Act, they would have obtained that exemption.

(k) The Minister's decision was one which no reasonable Minister could have reached since, having regard to the Warden's findings that:

(i) the ground the subject of the tenements is contained within the Archaean Greenstone belt, this being a highly competitive priority area for gold exploration within the State;

(ii) the ground the subject of the tenements does have further exploration potential;

(iii) no significant expenditure had been incurred on the ground the subject of the tenements since 1989;

(iv) the tenement holders had no intention to carry out further exploration at present although they acknowledged that the ground the subject of the tenements had further exploration potential;

the decision was inconsistent with the legislative object described in (f) above."

42 These grounds are concerned with the legal validity of the substance of the advice of the Department as contained in the memorandum of the Director-General of Mines to the Minister dated 22 April 1998. Reference was made in that memorandum to the contentions on behalf of Mr Roberts that the previous advice from the Director, Geological Survey was "fundamentally flawed" for the following reasons:

"(a) no reference is made to the exploration potential of the leases. As a matter of logic, an exemption under s 102(2)(e) should not be available when further exploration can be carried out on the tenements in order to comply with the expenditure requirements and such exploration, if successful, could well render the tenements economically viable to mine;

(b) the Director is applying a subjective test, that is, are the tenements uneconomic for the tenement holder to mine and not an objective one - can anyone mine the tenements economically. Jackson McDonald submit that it is the objective test which should be followed. The Warden found that a smaller mining operation could perhaps economically mine the tenements.

(c) the Warden has considered the matter in an adversarial situation with the benefit of evidence from Dr Ruddock (Geological Survey Division), which was tested in cross-examination and found lacking. To then seek and act upon advice from the Director, Geological Survey is not justifiable or correct in circumstances where a senior employee of Geological Survey Division has given evidence at the hearings of the plaints and the Warden has assessed that evidence in the course of making his recommendation to you."

43 In pars 11 - 13 of the memorandum the Director-General advised the Minister as follows:

"11. Although the Mining Act provides that a holder must meet the expenditure requirements every year on every tenement that it holds the exemption provisions of the Act allow for a situation where expenditure is not met for valid reasons. If the tenement was over an area which had been previously unexplored by the holder and no work of any kind had occurred then exemptions would not be granted and in fact forfeiture action would most likely be initiated. An exemption on uneconomic grounds must be considered in terms of the holders claim and cannot take into consideration whether the same 'uneconomic' deposit could be mined by another individual.

12. The Mining Act and departmental policy allows exemption for successive periods of up to five (5) years on a mining lease provided that the lessee has done sufficient work to establish a resource. This was always the case prior to the introduction of retention licences and continues to be an alternative option to applying for retention licences.

13. If a lessee has spent a substantial amount to delineate and define an ore reserve, it is reasonable for the company to expect that it should be able to recover some of that expense through the joint venturing or eventual sale of those tenements if it considers the resource uneconomic for its purposes. It then follows that the Director, Geological Survey should only be expected to determine if the resource has been proven uneconomic to that operator who holds the ground."

44 In my opinion, the last sentence of each of par 11 and par 13 contradict the decision of the Warden. The Warden determined, as a matter of law on the proper construction of the Act, that the question whether a particular deposit or deposits is or are economic was not to be determined subjectively by reference to the situation of the particular holder and his other operations and holdings, but was to be determined objectively. In particular, the consideration whether the development of the subject tenement was uneconomic to the holder of the tenement was held by the learned Warden to be an irrelevant consideration. His Worship said it is not a matter of policy to be determined by the Department or the Minister, but by the proper construction of s 102(2)(e), which requires an objective assessment.

45 The failure to make the required expenditure is a breach of a statutory obligation. Where a forfeiture application is made and rejected, the position remains that the holder of the tenement is in breach of the statutory obligation with respect to expenditure. As in this case, the holder was punished for the breach by being required to pay a fine.

46 The question before the Minister, however, was not whether an exemption should be granted. It was whether, an exemption having been refused, the mining leases should be forfeited as recommended by the Warden or the matter dealt with by way of the payment of a fine as recommended by the Director General of the Department. In this context the refusal of the exemption on the ground on which it has been sought was a relevant but not a decisive consideration.

47 The question which then arose was whether regard could be had by the Minister to what might or would have been relevant in relation to a properly constituted application for exemption. It was submitted that this was not a permissible approach because there was no exemption in this case. The application for an exemption which was made was refused. In my opinion, this was not the point. In deciding whether or not to forfeit the leases the Minister was entitled to take all relevant circumstances into account. His discretion was much wider than a mere consideration of the question whether, had there been an application for exemption under the correct provision, it would have been granted. In my opinion, however, to the extent that the decision was based upon the view expressed by the Department that such an application would have been granted, it resulted in a decision that was wrong in law. The Minister's decision not to forfeit was clearly based on his approval of a recommendation which embodied an error of law. The approval of the recommendation necessarily involved the adoption of the legal basis of the recommendation. The decision of the Minister was therefore one which failed to take into account a relevant consideration, namely, whether the deposit on the mineral leases could be economically viable for a stand-alone operator, and took into account an irrelevant consideration, namely that they would not be economically viable for the holder to develop. Given that the Minister was not an inferior court but acting as an administrative tribunal not exercising judicial power, the position was as stated in the joint judgment of the High Court in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 177-178 where their Honours said:

"Similarly, jurisdictional error will occur where an inferior court disregards or takes account of some matter in circumstances where the statute or other instrument establishing it and conferring its jurisdiction requires that that particular matter be taken into account or ignored as a pre-condition of the existence of any authority to make an order or decision in the circumstances of the particular case. Again, an inferior court will exceed its authority and fall into jurisdictional error if it misconstrues that statute or other instrument and thereby misconceives the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case."

48 In such a case a jurisdictional error will include a failure to take into account a relevant consideration or taking into account an irrelevant consideration. As their Honours said at 179:

"If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error ..."

49 The evidence of the Minister's decision is his stamp of approval on the recommendation of the Director-General followed by his letter dated 29 April 1998 to the applicant's solicitors in which he said:

"Following a close examination of all relevant papers including the submissions lodged by the parties I have decided to exercise my discretion pursuant to s 99 of the Mining Act and impose a fine of $1000 on each lease (a total of $2000) in lieu of forfeiture, with half of this amount being awarded to the plaintiff.

Should the fine not be paid within 30 days of the lessee being notified, the lease is then forfeited with preferential pegging rights being given to the plaintiff."

50 In my opinion, it is apparent that the Minister approved and adopted the advice which he was given regarding the interpretation and application of the relevant provisions of the Act. This advice was wrong in law and inconsistent with the interpretation of the relevant provisions which had been made by the Warden. The latter was clearly right. As distinct from s 102(e), s 102(f) contemplates a situation where it may not be economic for the holder to mine a particular deposit separately, but it may be economic to do so at some stage in conjunction with other mining operations of the holder. That opens the door to a subjective test. Section 102(e), however, requires an objective test.

51 For these reasons I am of the opinion that the order nisi should be made absolute.

52 PIDGEON J: I agree with the reasons of the Chief Justice.

53 IPP J: I have read the reasons to be published by Malcolm CJ. I agree with them and his Honour's conclusions. I have nothing further to add.