Supreme Court of WA|2009-05-14|Before: Mr J, Commission J, Miere J

YARRI MINING PTY LTD -v- EAGLEFIELD HOLDINGS PTY LTD [2009] WASC 125 (14 May 2009)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : YARRI MINING PTY LTD -v- EAGLEFIELD HOLDINGS PTY LTD [2009] WASC 125

MATTER : Claim for declaration for exploration licences to be declared a nullity pursuant to the Mining Act 1998

BETWEEN : YARRI MINING PTY LTD (ACN 120 304 261)

MINISTER FOR ENERGY, RESOURCES, INDUSTRY AND ENTERPRISE

Mining Act 1978 (WA) - Claim for declaration that mining licences granted by the Minister to the first defendant were a nullity - Whether the prohibition against applying for the grant nullifies the Minister's decision - Turns on own facts

Crown Suits Act 1947 (WA) - Effect of non-compliance with s 6 of the Crown Suits Act - Whether the court should decline to declare the licences nullities due to the plaintiff's non-compliance - Turns on own facts

Limitation Legislation Amendment and Repeal Act 2005 (WA)

First Defendant : Mr E M Corboy SC & Mr J D Steedman

Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564

Atkins v Minister for Mines (1996) 15 WAR 226

Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334

Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421

Hunter Resources Ltd v Melville [1988] HCA 5; (1987) 164 CLR 234

Judamia v The State of Western Australia (Unreported, SCt of WA FCt, Library No 960114S, 1 March 1996)

Judamia v The State of Western Australia (Unreported, SCt of WA, Library No 950137, 23 January 1995)

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

R v Trade Practices Tribunal, ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; (1970) 123 CLR 361

Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438

Tasker v Fullwood [1978] 1 NSWLR 20

Yougarla v The State of Western Australia [1999] WASCA 248; (1999) 21 WAR 488

1 LE MIERE J: This action turns on two questions. First, are exploration licenses granted by the Minister to the first defendant (Eaglefield) nullities because Eaglefield applied for the exploration licences on behalf of the second defendant (Narnoo) in circumstances where it was prohibited from doing so by s 69 of the Mining Act 1978 (WA) (the Act)? Section 69 provides that when an exploration licence expires the former holder, or persons acting on his behalf, cannot reapply for an exploration licence over the same area for a period of three months after its expiry. Second, is the court precluded from declaring the exploration licenses to be nullities, or alternatively should the court in the exercise of its discretion decline to declare the exploration licences to be nullities, because the plaintiff did not comply with the requirements of s 6 of the Crown Suits Act 1947 (WA) (Crown Suits Act) to give notice of the intended action and to commence the action within one year of the date on which the cause of action accrued?

2 Michael Fewster and his wife, Suzanne, are the sole directors and shareholders of Eaglefield. Mr Fewster gave evidence that, in effect, he has conducted his business affairs through Eaglefield.

3 In 1998 Mr Fewster arranged for Narnoo to be incorporated. Initially Mr Fewster's brother-in-law, Mark Busani, was the sole director and shareholder of Narnoo. On 10 January 2001, at the request of Mr Fewster, Mr Busani transferred his share in Narnoo to Mr Fewster. On 30 March 2001 Mr Fewster became the sole director of Narnoo.

4 Immediately prior to 11 July 2000 Narnoo held exploration licence 39/824 (E39/824). E39/824 covered land including the land in the following graticular blocks: 1700A, 1799B, 1700J, 1700O, 1700P, BJOP, 1773K and 1774L (the overlapping area). On 11 July 2000 Narnoo surrendered E39/824.

5 On 10 August 2000 Eaglefield made two applications for exploration licences (ELA39/876 and ELA39/877). ELA39/876 covered land including graticular blocks 1700A and B. ELA39/877 covered land including graticular blocks 1700J, 1700O, 1700P, 1773K and 1774L. That is, ELA39/876 and ELA39/877 covered land including the overlapping area.

6 In May 2001 Mr Fewster prepared and executed a deed of trust in which Eaglefield declared that it held its interest in ELA39/876 and ELA39/877 on trust for Narnoo.

7 On 28 February 2003 the Minister responsible for the administration of the Act granted exploration licenses (E39/876 and E39/877) to Eaglefield for the whole of the areas applied for, including the overlapping area.

8 In May 2007 Energy and Minerals Australia Ltd (EMA) acquired all the issued capital of Narnoo. On 19 March 2008 Eaglefield transferred EL39/876 and EL39/877 to Narnoo.

9 In April 2008 EMA made a public offering to raise funds from investors. EMA was subsequently listed on the Australian Stock Exchange.

10 The plaintiff (Yarri) was incorporated in July 2006. In July and August 2008 Yarri applied for exploration licences over land the subject of E39/876 and E39/877.

11 On the pleadings, Yarri alleged, and both Eaglefield and Narnoo denied, that Eaglefield made ELA39/876 and ELA39/877 on behalf of Narnoo. On the second day of the trial, during the cross-examination of Mr Fewster, it was conceded by senior counsel for each of Eaglefield and Narnoo, that Eaglefield, at the time it made applications ELA39/876 and ELA39/877, made the applications on behalf of Narnoo within the meaning of, and in contravention of, s 69 of the Act. Following that admission, what remains to be determined is the legal consequence of that contravention.

12 The Minister for Energy, Resources, Industry and Enterprise, the third defendant, and the Director General of Mines, the fourth defendant, are each represented by the State Solicitor's Office. The State Solicitor's Office has stated that the third and fourth defendants intend to abide by the decision of the court, save as to costs.

13 The Act regulates the ways in which mining activities may be carried out. Four types of exploration licences are provided for in the Act. These are prospecting licences, which are small-scale exploration licences, special prospecting licences, exploration licences and retention licences. An exploration licence permits extensive earthworks and the extraction of material. Exploration licences are dealt with in pt IV div 2 of the Act.

14 Section 69 does not itself provide for the grant of an exploration licence. The power to grant an exploration licence is conferred on the Minister by s 57. At the relevant time s 57(1) provided:

Subject to this Act the Minister may on the application of any person and after receiving a recommendation of the mining registrar or the warden in accordance with section 59, grant to that person a licence to be known as an exploration licence on such terms and conditions as the Minister may determine.

15 The area of an exploration licence is described by reference to graticular sections. There is a permitted maximum of 70 graticular sections or blocks. The licence is in force for five years and may be extended. At the end of the third of the five years, at least half the area covered by an exploration licence must be surrendered. One half of the remaining area must be relinquished at the end of the fourth year.

16 Section 58 provides for an application for an exploration licence. Section 58(1) sets out the formal requirements of an application. The application must specify a work and expenditure programme and disclose the resources of the applicant. Notices must be sent to interested parties and be publicly advertised.

17 Several conditions are imposed on the holder of an exploration licence. The holder must comply with an expenditure condition.

18 The holder of an exploration licence may apply for, and has priority for the grant of, a mining lease, or leases, over any land within the licensed area.

19 Section 59 provides for objections and recommendations to the Minister by the mining registrar or the warden. Any person may object to the granting of an application for an exploration licence. If an objection is lodged then the warden hears the application for the exploration licence. Where no notice of objection is lodged the mining registrar shall, except in specified cases, forward to the Minister a report which recommends the grant or refusal of the exploration licence and the reasons for that recommendation.

20 Section 59(6) provides that the Minister may grant or refuse an exploration licence irrespective of whether the report recommends grant or refusal of a licence and irrespective of whether the applicant has complied with the provision of the Act. Section 59(6) is in these terms:

On receipt of a report under subsection (2) or (5), the Minister may grant or refuse the exploration licence as the Minister thinks fit, and irrespective of whether -

(a) the report recommends the grant or refusal of the exploration licence; and

(b) the applicant has or has not complied in all respects with the provisions of this Act.

21 I should also refer to s 116(2) of the Act, which is a form of indefeasibility provision. It provides:

Except in the case of fraud, a mining tenement granted or renewed under this Act shall not be impeached or defeasible by reason or on account of any informality or irregularity in the application or in the proceedings previous to the grant or renewal of that tenement and no person dealing with a registered holder of a mining tenement shall be required or in any way concerned to inquire into or ascertain the circumstances under which the registered holder or any previous holder was registered, or to see to the application of any purchase or consideration money, or be affected by notice, actual or constructive, of any unregistered trust or interest any rule of law or equity to the contrary notwithstanding, and the knowledge that any such unregistered trust or interest is in existence shall not of itself be imputed as fraud.

22 This case turns on the consequence of an exploration licence having been granted as a result of an application made in contravention of s 69. Section 69 has been amended on a number of occasions. The parties agreed that s 69 should be considered as it was in 2000 when Eaglefield made the ELAs. At the time s 69(1) provided:

When an exploration licence is surrendered or forfeited, or expires, or any part of the land the subject of the licence is relinquished in accordance with section 65, the land the subject of the licence or the part so relinquished shall not be marked out or applied for as a prospecting licence or an exploration licence by or on behalf of the person who was the holder of the exploration licence immediately prior to the date of the surrender, forfeiture, expiry or relinquishment or by or on behalf of any person who had an interest in the exploration licence immediately prior to that date, within a period of 3 months from and including that date.

23 The effect of s 69(1) is that when an exploration licence expires, the former holder, and persons acting on his behalf, must wait at least three months before applying for rights of exploration over the same area.

24 A principal object of the Act is to encourage and promote mining and exploration. That object is sought to be carried into effect by making available tenements, amongst other things, for exploration, subject to conditions, including conditions with respect to expenditure. The Act seeks to encourage the holder of an exploration licence to actively explore for minerals. In his speech on moving that the bill, that subsequently became the Act, be read a second time, the Minister said:

What the government wants to achieve is legislation which will discourage people from occupying land without trying to prospect or mine it, whichever is the case, and prevent them from merely occupying the land so that other people do not have access to it. Some people do this with the aim of acting as an intermediary between the Crown, to whom the minerals belong in fact, and the people who wish to mine the minerals. They want to be the middle man and say that the general users of minerals have to pay them for it.

The Government feels the minerals belong to the Crown and should be allocated by the Crown for the genuine well-being of the community generally, whether it involves individuals, or small or large companies. Western Australia, Parliamentary Debates, Legislative Assembly, 25 October 1978, 4190 - 4191 (Mr Mensaros, Minister for Mines).

25 The, or a purpose of s 69(1) is to prevent a person, directly or through someone acting on his behalf, maintaining the exclusive right to explore an area without meeting exploration, expenditure or surrender obligations.

26 Yarri contends that the exploration licence applications (ELAs) made by Eaglefield in 2000 were made in contravention of s 69(1) and were invalid. Yarri says that the effect of that is that the exploration licences granted by the Minister under s 57(1) of the Act are invalid and nullities.

Consequence of failure to comply with statutory provisions

27 Eaglefield contravened s 69(1) of the Act by making applications for exploration licences in circumstances prohibited by s 69(1) of the Act. Are the exploration licences subsequently granted by the Minister invalid as a consequence of that contravention?

28 There is no formula to resolve issues of this kind. In Tasker v Fullwood [1978] 1 NSWLR 20 the New South Wales Court of Appeal, comprising Hope, Glass and Samuels JJA, in a passage that is frequently cited in other cases, enunciated the following propositions:

(1) The problem is to be solved in the process of construing the relevant statute. Little, if any, assistance, will be derived from the terms of other statutes or any supposed judicial classification of them by reference to subject matter. (2) The task of construction is to determine whether the legislature intended that a failure to comply with the stipulated requirement would invalidate the act done, or whether the validity of the act would be preserved notwithstanding non-compliance: the Franklins Stores Pty Ltd case ([1977] 2 NSWLR 955, 963). (3) The only true guide to the statutory intention is to be found in the language of the relevant provision and the scope and object of the whole statute: Hatton v Beaumont ([1977] 2 NSWLR 211, 220) (4) The intention being sought is the effect upon the validity of the act in question, having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe its requirement: Victoria v The Commonwealth ((1975) [1975] HCA 39; 134 CLR 81, 179 - 180). (5) It can mislead if one substitutes for the question thus posed an investigation as to whether the statute is mandatory or directory in its terms. It is an invitation to error, not only because the true inquiry will thereby be sidetracked, but also because these descriptions have been used with varying significations. (6) In particular, it is wrong to say that, if a statute is couched in directory terms, the act will be invalid, unless substantial performance is demonstrated: the Franklins Stores Pty Ltd case. A statute which, on its proper construction, does not nullify the act in question, even for total non-observance of the stipulation, is also described as directory in its terms: Victoria v The Commonwealth (23) - (24).

29 The plaintiff referred to Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355. The respondent, Australian Broadcasting Authority (ABA), was established by the Broadcasting Services Act 1992 (Cth). Section 122 imposed on the ABA an obligation to determine broadcasting standards. Section 160 provides that the ABA is to perform its functions in a manner consistent with stated criteria, including Australia's obligations under any convention to which Australia is a party or any agreement between Australia and a foreign country. Australia and New Zealand were parties to the Protocol on Trade in Services to the Australia New Zealand Closer Economics Relations Trade Agreement 1983. Article 4 of the Protocol had the effect that each member state granted to persons of the other member state and services provided by them access rights in its market no less favourable than those allowed to its own persons and services provided by them. Article 5(1) made a similar provision as to no less favourable treatment. The ABA determined an Australian content standard, cl 9 of which made provisions, in relation to certain television broadcasts, which required Australian material to be 'at least 50% of all programming in a year that was made without financial assistance from the television production fund'. Six New Zealand companies contended that the standard was invalid because cl 9 was inconsistent with articles 4 and 5 of the Protocol and hence s 160 and s 122 had not been complied with. Davies J declared that the Standard was invalid as being inconsistent with the Trade Agreement and Protocol. The Full Federal Court set aside that order. The New Zealand companies appealed to the High Court.

30 The High Court reversed the decision of the Full Federal Court. The court held that on the proper construction of s 122, the ABA must determine standards relating to the Australian content of programmes but only to the extent that those standards are consistent with the directions in s 160. McHugh, Gummow, Kirby and Hayne JJ, in a joint judgment, held that cl 9 of the standard was inconsistent with articles 4 and 5 of the protocol, s 160 was not satisfied and accordingly, s 122 prohibited the making of cl 9. The High Court declared that cl 9 was unlawfully made.

31 The joint judgment then went on to consider whether the failure to comply with s 160 meant that cl 9 of the standard is invalid. Their Honours said:

An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied (Howard v Bodington (1877) 2 PD 203 at 211, per Lord Penzance); there is not even a ranking of relevant factors or categories to give guidance on the issue [91].

Consequence of the failure to comply with s 69

32 Section 57 empowers the Minister to grant an exploration licence on the application of any person and after receiving a recommendation of the mining registrar or the warden in accordance with s 59. Eaglefield made applications for exploration licences but in doing so contravened s 69. It may be argued that a lawful application is an essential preliminary to the exercise of the Minister's power to grant an exploration licence. Some support for invalidity is found in s 18 of the Act which provides, relevantly, that:

All Crown land, not being Crown land that is the subject of a mining tenement, is open for mining and as such is land -

...

(c) which may be made the subject of an application for a mining tenement,

subject to and in accordance with this Act. (Emphasis added).

33 In determining the issue of validity the court should ask itself whether it was a purpose of the Act that a licence granted on an application made in breach of s 69 should be invalid. In determining the question of purpose, 'regard must be had to the language of the relevant provision and the scope and object of the whole statute': Project Blue Sky [93].

34 Under s 57(1) of the Act, the power to grant an exploration licence is made 'subject to this Act'. The defendants submit that this requires the identification within the Act of any limitations on that power. They submit that there are such limitations which are expressed in clear terms and expressly use the language of grant. Specifically, s 60(3) provides that:

An exploration licence shall not be granted unless a security has been lodged by the applicant for the exploration licence in accordance with subsection (1).

Narnoo points to other sections of the Act which express limitations on the power to grant licences. The sections referred to relate to the granting of a prospecting licence (s 52(3)); a mining lease (s 70(7b), s 76 and s 120(2)); a retention licence (s 70D(7), s 70F(3)); a miscellaneous licence (s 91(6)) and mining tenements (s 29(2)). Narnoo submits that, by way of contrast, s 69 of the Act does not place any limitation on the power of the Minister to grant exploration licences and is expressed in different language to the sections which place limits on the power to grant tenements.

35 That argument is not compelling. The power of the Minister to grant an exploration licence is conditioned on a person making an application and is 'subject to this Act'. Section 69 expressly prohibits a person from making an application in the circumstances there specified.

36 The far-reaching and undesirable consequences of treating a breach of s 69 of the Act as invalidating a subsequent grant of an exploration licence indicates that it was not a purpose of the Act that a breach of s 69 was intended to invalidate the grant of an exploration licence made on that application.

37 There is a register of mining tenements and dealings that is open to public inspection (s 103F). An exploration licence (other than in its first year of operation) may be sold, mortgaged or charged as security for a loan without ministerial approval (s 119). Subject to the Act, and to any special conditions of the particular licence, the holder of an exploration licence is entitled to apply for and receive a mining lease, or leases, over any land within the licence area (s 67(1)). A mining lease entitles the holder to extract, and to dispose of, any minerals on, or in, the land for which the lease is granted.

38 Third parties may acquire exploration licences, or interests in the licences, for valuable consideration and may do so in reliance upon the register. Third parties might subsequently apply for, and obtain as of right, a mining lease over the area, or part of the area, the subject of an exploration licence obtained from a person to whom the exploration licence was granted after applying for the licence in breach of s 69. Great public inconvenience would result if an exploration licence obtained, or relied upon, by a party other than the original applicant and in ignorance of any breach of s 69 of the Act, was to be invalid because of a breach of s 69 of the Act.

39 In Project Blue Sky the joint judgment said:

Courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity of the act [97].

40 Having regard to the transferability of exploration licences and the right of the holder of an exploration licence to obtain a mining lease covering any part of the land the subject of the exploration licence, if an exploration licence granted on an application made in breach of s 69 is invalid, it is likely to result in much inconvenience to those members of the public who have acted in reliance on the grant of the exploration licence and its entry on the register.

41 The unlikelihood that the parliament intended a breach of s 69 of the Act to result in invalidity of an exploration licence granted upon such an application is reinforced by provisions of the Act dealing with non-compliance with statutory requirements.

42 Section 59(6) of the Act provides that on receipt of the report of the mining registrar or warden, the Minister may grant or refuse the exploration licence as the Minister thinks fit, and irrespective of whether the applicant has or has not complied in all respects with the provisions of the Act.

43 The legislative intent that invalidity should not follow from the grant of a licence granted upon an application made in breach of the provisions of the Act is further reinforced by s 116(2), which I have set out earlier in these reasons. Section 116(2) is consistent with a legislative intention that once a licence is granted, it is important for people to be able to rely on the validity of the licence notwithstanding any irregularity in the application that led to the grant of the licence.

44 Yarri submits that if a breach of s 69 of the Act did not lead to the invalidity of a licence granted upon the application, a person could thwart the object of the Act by indefinitely warehousing land under successive exploration or prospecting licences, without meeting exploration, expenditure or surrender obligations, while also avoiding forfeiture applications. However, the consequence of a breach of s 69 not resulting in consequential invalidity of a licence granted is not that s 69 has no effect.

45 A person who acts in contravention of s 69 commits an offence for which he is liable to a penalty under s 154. Furthermore, an exploration licence is liable to forfeiture if the holder of the exploration licence is convicted of an offence against the Act (s 63A). Where an exploration licence is liable to forfeiture by virtue of s 63A the Minister may cause the licence to be forfeited by publishing a notice in the Government Gazette (s 96A).

46 Of course, if a breach of s 69 is discovered prior to the grant of an exploration licence, the Minister may refuse to grant an exploration licence. An objector could object to the grant of an exploration licence on the ground that the application was made in breach of s 69.

47 Yarri referred to Hunter Resources Ltd v Melville [1988] HCA 5; (1987) 164 CLR 234, and in particular to the judgment of Dawson J. Section 49 of the Act as then in force empowered the warden, on the application of any person, to grant a prospecting licence. Section 105(1) required an applicant for a mining licence, including a prospecting licence, before making an application for the licence, to mark out in the prescribed manner the land in respect of which the tenement was sought. An applicant for a prospecting licence had marked out the tenement in a way that did not comply with the prescribed manner. The mining warden refused the application because of non-compliance. Wilson, Dawson and Toohey JJ, with Mason CJ and Gaudron J dissenting, held that the warden had acted according to law in refusing the application.

48 Dawson J had regard to the history of the Mining Act as it then was. His Honour referred to a 1984 report made by a committee set up by the Western Australian Government to enquire into aspects of the Act. The Mining Amendment Act 1985 (WA) was passed to implement most of the committee's recommendations. Under the second term of reference the committee dealt with suggestions that the Act should contain an express power for the warden or the Minister to grant title notwithstanding non-compliance with the Act or the regulations. The committee noted that such a power already existed in relation to a mining lease and recommended that it was not necessary to include a power for the Minister to dispense with strict compliance with the formalities of an application in the case of an application for a mining tenement except for the existing power in relation to a mining lease. Dawson J then said:

In my view it is possible to draw the conclusion from the nature of the amendments to the Act by the Mining Amendment Act 1985, and, in particular an amendment made to s 105 itself, that it was the intention of the legislature that there should be strict compliance with the manner prescribed for marking out land in respect of which a mining tenement is sought. That conclusion does not arise from the amendments by themselves because none of them mentions the need for strict compliance. But it does arise from the absence of any provision to that effect in the amending Act when that Act is read with both the committee's report and the second reading speech of the Minister (254).

Having discussed the reliance of the court upon extrinsic materials to which he referred, and the limits in ascertaining the intention of the legislature with regard to prior legislation by reference to amending legislation, Dawson J continued:

No such limitation applies in this case, however, where the legislature amended the Act but refrained from amending it more extensively upon the assumption, which may be seen from the extrinsic materials, that it already required strict compliance with the relevant provisions. Upon this basis and for the other reasons which I have given, it is my view that the legislation should be construed as requiring strict compliance with the marking out provisions and the warden was correct in so construing it.

49 When Hunter Resources v Melville was decided, s 105(6) conferred on the Minister the power to grant a mining lease irrespective of whether the applicant had complied in all respects with the provisions of the Act. There was no such dispensing power in relation to prospecting licences or exploration licences. In 1994 the Act was amended to insert s 59(6) which confers on the Minister the power to grant an exploration licence irrespective of whether the applicant has or has not complied in all respects with the provisions of the Act. Accordingly, the observations of Dawson J in Hunter Resources v Melville do not support Yarri.

The plaintiff's alternative argument - excision of common blocks by s 105B

50 Yarri submits that an exploration licence has within the grant itself the statutory recognition under s 105B that if the grant purports to be over land that was not available to be granted and this can be established by survey, then that unavailable land shall be excised and in effect never forms part of the grant. The Minister only has power to grant the licence over land that is available. Whether or not s 69 invalidates an application for an exploration licence, the effect of s 69 is that the common blocks, that is the graticular blocks that constitute the overlapping area, were not available for grant to Eaglefield under ELA39/876 and ELA39/877. Accordingly, Yarri submits, by reason of s 105B of the Act, the grant of E39/876 and E39/877 did not include the common blocks.

51 Yarri refers to Atkins v Minister for Mines (1996) 15 WAR 226. In that case the Minister granted an exploration licence, and subsequently a mining lease, in respect of land that had previously been declared exempt from grant under s 57(4). Rowland J held that the Minister only has jurisdiction or power to grant a licence over land that is not subject to other mining tenements or is not exempt pursuant to s 57(4). This is a very different case. Section 69 does not provide, or have the effect, that land is not open for mining or is not available for the grant of an exploration licence in the circumstances specified in s 69.

52 For the reasons stated the grant of E39/876 and E39/877 was not invalid and the exploration licences are not nullities. That is sufficient to dispose of this action. However, I will set out my conclusions on the other matters argued.

53 If, contrary to my finding, s 69 is a limit upon the Minister's power to grant an exploration licence, the question arises as to the extent of the limitation.

54 Narnoo submits that the purpose of s 69 is to prevent one person, or group of persons having continuous and unbroken access to an area for exploration purposes, to the exclusion of all others who may also wish to obtain access. That purpose, they submit, is sufficiently met by limiting the Minister's power to grant an application to the extent to which there is an overlap between previously held tenements and the newly applied for tenements. Narnoo submits that it would be contrary to the general purpose of the Act, to encourage and promote the prospecting and exploration for, and mining of, mineral deposits in Western Australia, for the limitation contained in s 69 to have any wider effect than in relation to the extent of overlapping sections.

55 I accept the defendants' submission. Section 69 provides that:

The land the subject of the [surrendered, forfeited or expired] licence or the part so relinquished shall not be marked out or applied for as a prospecting licence or an exploration licence by or on behalf of the person who was the holder of the [surrendered, forfeited or expired] exploration licence.

Eaglefield was at liberty to apply on behalf of Narnoo for an exploration licence the subject of ELAs 39/876 and 39/877, except for the overlapping land. Insofar as ELAs 39/876 and 39/877 applied for a licence covering the land, excluding the overlapping land, the applications did not breach s 69 and were not invalid. The purpose of s 69 is achieved if the exploration licences granted by the Minister are invalid only to the extent that they covered land in respect of which Eaglefield was prohibited by s 69 from applying for.

56 If s 69 invalidates an exploration licence applied for in breach of that section, then E39/876 and E39/877 do not include any part of the overlapping area.

57 The relief claimed by Yarri is a declaration that E39/876 and E39/877 are nullities or alternatively a declaration that E39/876 and E39/877 do not include any part of the overlapping area. The defendants submit that if Yarri establishes that the exploration licences are, wholly or in part, nullities declaratory relief should not be granted because such relief cannot be granted against the third and fourth defendants in circumstances where the plaintiff has failed to comply with the requirements of either s 6 on the Crown Suits Act or s 47A of the Limitation Act 1935 (WA) (Limitation Act).

58 Yarri's claim is for declarations that the exploration licences granted to Eaglefield were either wholly or in part nullities, that is that the grants were void and of no legal effect. The grants were made by the Minister and the declarations are directed to the legal effect of his actions. The relief sought against the fourth defendant, the Director-General, is consequential on the grant of the declarations.

59 Yarri claims that by reason of s 69 of the Act Eaglefield could not apply for any exploration licence over any part of the overlapping area. Yarri submits that the applications for the exploration licences were unlawful and incompetent, alternatively unlawful and incompetent to the extent that they related to the overlapping area. Further, Yarri submits that the overlapping area was not available for the purposes of any grant to Eaglefield. Yarri submits that the Minister had no power to make any grant on Eaglefield's applications, or alternatively, any grant relating to the overlapping area. Yarri submits that by reason of those matters the purported grant of the exploration licences by the Minister was of no force or effect and is a nullity, or alternatively, was of no force and effect and a nullity so far as it relates to the overlapping area.

60 Senior counsel for Eaglefield submits that it is those matters that are alleged to comprise the combination of facts giving rise to the right of action for declaratory and consequential relief. The claim for relief necessarily presupposes that the plaintiff establishes a right to relief against the Minister and the Director-General. That is because the subject matter of the right to relief - and of the relief itself - is the Minister's power to grant the exploration licences and the legal effect of the grants. If there is no right of action against the Minister and the Director-General, then there is no right to the relief claimed.

61 Eaglefield submits that there is no legal relationship between Yarri and Narnoo and declarations in the terms sought by Yarri have no legal consequences if they do not bind the Minister. This, senior counsel submits, demonstrates both the lack of any right to the declaratory relief claimed and the absence of any utility in making the declarations sought if there is no right of action or declaratory relief against the Minister and the Director-General. Thus, it is necessary to consider whether Yarri has a right of action, or a right to declaratory relief, against the Minister and the Director-General.

62 The Limitation Legislation Amendment and Repeal Act 2005 repealed s 6 of the Crown Suits Act but provided that s 6 would continue to apply to causes of action that had accrued as if it had not been repealed. At the relevant time s 6 provided:

Subject to the provision of subsections (2) and (3) of this section, no right of action lies against the Crown unless -

(a) the party proposing to take action gives to the Crown Solicitor, as soon as practicable or within three months (whichever of such periods is the longer), after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and the name and address of the party and his solicitor or agent; and

(b) the action is commenced before the expiration of one year from the date on which the cause of action accrued,

and for the purposes of this section where the act, neglect, or default on which the proposed action is based is a continuing one, no cause of action in respect of the act, neglect or default accrues until the act, neglect or default has ceased but the notice required by paragraph (a) of this subsection may be given and an action may thereafter be brought while the act, neglect or default continues.

63 The plaintiff admits that it has not complied with either paragraph of s 6(1) of the Crown Suits Act but says that neither the Minister nor the Director-General are 'the Crown' for the purposes of s 6(1) of the Crown Suits Act. The plaintiff says that 'Crown' is defined by s 3 to mean 'the Crown in right of the Government of Western Australia'. Section 10(2) of the Act provides that the Minister shall be a corporation sole. Yarri says that the Minister, as a corporation sole, is not the Crown.

64 The Minister is the Crown for the purposes of s 6(1) of the Crown Suits Act. The Crown includes the departments of government that are headed by a Minister: Hogg P W and Monahan P J, Liability of the Crown (3rd ed, 2000) 11. The Minister heads a department of the Public Service of the State which assists the Minister in the administration of the Act: s 11 of the Act. The Director-General is the chief executive officer of the department. In carrying out his functions under the Act the Minister is performing governmental functions and is for relevant purposes the Crown. The definition in s 3 of the Crown Suits Act that the Crown means the Crown in right of the Government of Western Australia is to distinguish the government of Western Australia from the Commonwealth. The definition does not have the effect of excluding the Minister from the Crown.

Crown Suits Act applies to declaratory relief

65 Yarri submits that the Crown Suits Act is not intended to apply to the declaratory relief sought by it. That issue was discussed by a number of judges of this court in the Judamia litigation: see Judamia v The State of Western Australia (Unreported, SCt of WA, Library No 950137, 23 January 1995); Judamia v The State of Western Australia (Unreported, SCt of WA FCt, Library No 960114S, 1 March 1996); Yougarla v The State of Western Australia [1999] WASCA 248; (1999) 21 WAR 488. In Yougarla Ipp J said that five judges of this court have come to the same conclusion that s 6 of the Crown Suits Act applies to an action for declaratory relief against the Crown. His Honour said that taking into account that fact and having regard to the fact that he had held on three other grounds the appeal should fail, he did not think it necessary or appropriate to add to what had been said in that respect [66]. Similarly, Anderson J said that it was the unanimous view of five Judges of this Court that the Crown Suits Act applies to proceedings for declaratory relief against the Crown and that as 'that question has been fully discussed in those other judgments, there is nothing useful to be gained by adding obiter observations on the subject' [148]. I will follow the views expressed by the court in Judamia and Yougarla and hold that Crown Suits Act s 6 applies to the declaratory relief sought by Yarri against the Minister.

66 In this case Yarri also seeks relief against the Director-General. That relief is not bare declaratory relief. It is coercive relief in the sense that it requires the Director-General to do something. Crown Suits Act s 6 applies to that relief sought.

67 Because the provisions of the Limitation Act generally bar Yarri's remedy, rather than extinguishing Yarri's rights, the defendants must specifically plead the running of the period by way of defence. If the defendants do not plead limitation, the court should not consider the matter of its own motion. However, the Crown Suits Act differs from the Limitation Act in that the Crown Suits Act confers a new cause of action, whereas s 47A of the Limitation Act regulates the time within which an action available at common law may be commenced. If a plaintiff has not complied with Crown Suits Act s 6, then it has no cause of action, and no right to relief, against the Crown and that is so whether or not the Crown has specifically pleaded Crown Suits Act s 6.

68 The statement by the third and fourth defendants that they will abide the decision of the court is not a consent to the bringing of the action notwithstanding non-compliance with Crown Suits Act s 6. Yarri has no right to bring the action against, or obtain relief against, the third and fourth defendants. The question that remains is whether the court may make the declarations sought against Eaglefield and Narnoo.

Declaratory relief available against first and second defendants

69 The Supreme Court has inherent power and statutory power to grant declaratory relief. The nature and limits of the court's power was considered by the High Court in Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564. In their joint judgment, Mason CJ, Dawson, Toohey and Gaudron JJ said:

It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which '[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise' (Forster v Jododex Aust Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 at 437 per Gibbs J). However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions ... The person seeking relief must have 'a real interest' (Forster v Jododex at 437 per Gibbs J; Russian Bank at 448 per Lord Dunedin) and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' ... or if 'the court's declaration will produce no foreseeable consequences for the parties' (581) - (582).

70 In Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ made observations about the circumstances in which it would be appropriate for a court to give a declaratory judgment. Their Honours referred to the statement of Kitto J in R v Trade Practices Tribunal, ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8; (1970) 123 CLR 361 [45]:

Judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons ... [T]he process to be followed must generally be an enquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which ... entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts as shown to exist [374].

71 At [46] their Honours referred to the following statement of Professor Borchard in 'Declaratory Judgments' (1934):

A judgment of a court is an affirmation, by the authorised societal agent of the state ... of the legal consequences attending a proved or admitted state of facts. It is a conclusive adjudication that a legal relation does or does not exist. The power to render judgments, the so-called 'judicial power', is the power to adjudicate upon contested or adverse legal rights or claims, to interpret the law, and to declare what the law is or has been. It is the final determination of the rights of the parties in an action which distinguishes the judgment from all other public procedural devices to give effect to legal rights.

72 At [47] their Honours said that 'courts have traditionally refused to provide answers to hypothetical questions or to give advisory opinions' because the 'object of the judicial process is the final determination of the rights of the parties to an action'.

73 It is not a necessary condition for the exercise of the court's discretion to grant a declaration that the plaintiff has a cause of action against the defendant. The court may, in an appropriate case, grant a negative declaration, that is a declaration that the defendant has no right against the plaintiff - because there is no cause of action, or because the plaintiff has a defence to any proceedings the defendant might choose to bring: see Leeming M, 'The Negative Declaration in Australian and United States federal courts' (2004) 12 A J Admin L 55 and Young N J, 'Declarations and other remedies in administrative law' (2004) 12 A J Admin L 35.

74 If I was satisfied that E39/876 and E39/877 were nullities I would make a declaration to that effect against Eaglefield and Narnoo notwithstanding that the declaration cannot be made against the third and fourth defendants.

75 In Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448 Lord Dunedin summarised rules that have been elucidated by a long course of decisions in the Scottish Courts thus:

The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought.

The question raised in this case is a real, and not a theoretical, question. The question concerns the validity of the exploration licences granted to Eaglefield and now held by Narnoo. Yarri has a real interest in raising it. The answer to the question affects Yarri's applications for an exploration licence over the overlapping land. Yarri has been able to secure a proper contradictor. Narnoo has a true interest to oppose the declarations sought and has vigorously opposed it.

76 In Ainsworth Mason CJ, Dawson, Toohey and Gaudron JJ said that declaratory relief will not be granted if the 'court's declaration will produce no foreseeable consequences for the parties' (582). That is not the case here. The court's declaration will be binding upon the plaintiff and the first and second defendants and will affect the plaintiff's application for an exploration licence. Furthermore, the Minister and the Director-General, although not bound by the declarations, have stated that they will abide the court's decision and, as public officers, it is to be expected that they will act in accordance with the court's decision.

77 In Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 the Minister had granted to Jododex an exploration licence under the Mining Act 1906 (NSW). On 28 October 1969 Jododex applied under s 83B(13b) for a renewal of the licence, which was extended for a period of six months from 28 November 1969. Further renewals of six months were granted, the last of which commenced on 29 May 1971. On 7 November 1968 Forster applied under the Act for authorities to enter certain parts of the land covered by Jododex's licence in order to search for minerals. No authority to enter can be granted while an exploration licence is in force in respect of the land. On 26 March 1971 a mining warden began an enquiry into Forster's applications. Forster questioned the validity of the renewed exploration licence on the ground that the application for renewal was not made within the time prescribed by s 83B(13b). Jododex commenced proceedings in the New South Wales Supreme Court against Forster and the mining warden seeking declarations. Street J declared that Jododex was the holder of an exploration licence validly renewed over the land the subject of the applications by Forster for authority to enter. Forster appealed against this order to the High Court. The High Court affirmed the decision of Street J. There was no suggestion in the judgments of the members of the High Court that the declaration should be refused because the Minister was not a party to the proceedings or would not be bound by the declaration.

Legislation Amendment and Repeal Act 2005

YARRI MINING PTY LTD -v- EAGLEFIELD HOLDINGS PTY LTD [2009] WASC 125 (14 May 2009)

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Judgment (129 paragraphs)

YARRI MINING PTY LTD -v- EAGLEFIELD HOLDINGS PTY LTD [2009] WASC 125 (14 May 2009)

Legislation Cited (4)

Cases Cited (8)