Invalidity of mining lease application confirmed as Forrest's impact grows

Strict compliance is vital when lodging applications 5 min read

In the recent decision Onslow Resources Ltd v Minister for Mines and Petroleum, the WA Court of Appeal held that a mining lease application was invalid because it wasn't accompanied by a compliant mining operations statement – confirming that the effects of Forrest & Forrest Pty Ltd v Wilson continue to be felt by the state's mining industry.

Key takeaways 

• In Forrest & Forrest Pty Ltd v Wilson (2017) 262 CLR 510, the High Court held that where a statute providing for the grant of interests in a state's resources 'prescribes a mode of exercise of the statutory power', that mode must be strictly followed. A grant will be ineffective if the regime is not complied with (the Forrest approach).
• In Onslow Resources Ltd v Minister for Mines and Petroleum [2021] WASCA 151, the WA Court of Appeal applied the Forrest approach.
• This decision provides an additional warning for tenement applicants of the importance of strictly complying with the requirements of the Mining Act 1978 (WA) (the Mining Act). It further emphasises that, in the context of an application for a mining lease, non-compliant mineralisation reports and mining operations statements can't be 'cured' by providing supplementary information once the document has been lodged.
• Onslow v Minister for Mines adds to the developing body of case law from superior courts on the application of the Forrest approach, following last year's decision in Forrest & Forrest Pty Ltd v O'Sullivan [2020] WASC 468. There, the WA Supreme Court held that a failure to comply with the marking out requirements in section 105(1) of the Mining Act resulted in an invalid application for a prospecting licence.
• Both decisions serve as a reminder to tenement holders to take care when preparing and lodging mining tenement applications and supporting documentation, to minimise the risks to the validity of any granted mining tenure.

Forrest – a summary

We reported on Forrest shortly after it was handed down. That decision concerned applications lodged by Yarri Mining Pty Ltd and Onslow Resources Ltd in 2011, to convert exploration licences into mining leases. Section 74(1)(ca)(ii) of the Mining Act provides that an application for a mining lease shall be accompanied by a mining proposal, or a mineralisation report and mining operations statement. The applicants did not provide their mineralisation report until four months after the mining lease applications were lodged. The Mining Warden recommended the mining leases be granted and the Minister subsequently did so.

On appeal, the High Court interpreted the word 'accompanied' in that statutory context to mean that lodging the mineralisation report contemporaneously with a mining lease application was mandatory. The non-compliance was 'fatal to the validity' of the mining leases because of the failure to comply with the statutory conditions that were essential to the grant of mining leases. As a result, the leases were held to be invalid.

Onslow v Minister for Mines

Background

Onslow Resources Ltd lodged a mining lease application in May 2012.¹ It was accompanied by a mineralisation report and a cover letter describing Onslow's application and the sand deposit that it proposed to mine.² The documents didn't state they were a mining operations statement in accordance with s74(1)(ca)(ii) of the Mining Act, and failed to include the substantive information required to be so classified according to s74(1a) of the Mining Act. In August 2012, in response to a letter from the Department, Onslow submitted a revised mineralisation report and a 'supporting statement', which set out the information required by s74(1a).³ Its application was still pending when judgment was delivered in Forrest in 2017.

Following the decision in Forrest, an officer of the Department of Mines recorded that Onslow's mining lease application was invalid because it hadn't been accompanied by a mining operations statement.⁴ Onslow made an application to the WA Supreme Court for judicial review of the officer's decision, arguing that its covering letter was a mining operations statement. Although Onslow accepted that the letter was non-compliant with s74(1a) of the Mining Act, it contended that the letter was still sufficient to satisfy the essential preliminaries to the exercise of the Minister's power to grant a mining lease.⁵ The Supreme Court rejected Onslow's arguments and affirmed the officer's decision to record its mining lease application as invalid. Onslow proceeded to appeal to the Court of Appeal.

The Court of Appeal's decision

In dismissing the appeal, the Court of Appeal confirmed that Onslow's mining lease application was invalid because it wasn't accompanied by a mining operations statement. The court considered that 'there was no basis whatsoever' to read Onslow's cover letter as a mining operations statement⁶ and that the letter didn't contain any of the information required by s74(1a) of the Mining Act.⁷

The court also didn't accept Onslow's submission that a non-compliant mining operations statement could satisfy the essential preliminaries to the exercise of the Minister's power to grant a mining lease. It observed that:

• a mining operations statement either complied with s74(1)(ca)(ii) and 74(1a) or didn't;⁸
• there's no 'halfway house' in which a document includes sufficient parts of the information required by s74(1a) so as to enliven the Registrar's jurisdiction to consider the application, but insufficient information to comply with the Mining Act requirements;⁹ and
• Onslow couldn't 'cure' its failure to lodge a compliant mining operations statement by submitting supplementary information subsequent to lodgment of the application.¹⁰

What's next?

As we reported last year, the Mining Amendment (Procedures and Validation) Bill 2018 (WA) (the Validation Bill) was introduced on 28 November 2018 for the purpose of confirming the validity of all previously granted mining tenements, as a means of combating the ramifications of the Forrest approach. The Validation Bill stalled partway through the legislative process, as the WA Government came to the view that amendments to the Native Title Act 1993 (Cth) (the NTA) by Federal Parliament are needed first, to avoid complications associated with retrospective validations triggering the 'future act' regime under the NTA. We understand that discussions between the WA Government and Federal Government are continuing.