Insights

15/06/17

Validity of some granted mining tenements in Western Australia in question

The High Court will deliver judgment in a case in which the result might mean that procedural defects in an application may invalidate the tenement the subject of that application.  Specifically, where a mineralisation report has been submitted after (and not at) the time of the application, the Court might hold that the application is irrevocably flawed.

In advance of that decision, holders of granted tenure should consider whether there have been failures to comply procedural requirements of the Mining Act in the process of applying for tenements. If defects are identified it may be prudent to lodge applications over the area of the existing granted tenure to protect existing rights to that land. Such applications can be withdrawn if the High Court decides that compliance with the requirements of the Act are not mandatory.

Are the requirements of an application 'mandatory' - Supreme Court's view

Tenement applications, including mining lease applications and an application for a general purpose lease, were lodged over Minderoo pastoral lease. The holder of Minderoo, Forrest & Forrest Pty Ltd, lodged objections to the applications.

The dispute concerns, in part, the requirement of an applicant for a mining lease to accompany an application for a mining lease with:

  • a mining proposal;
  • a mineralisation report and a section 74(1a) statement; or
  • a resource report and a section 74(1a) statement.

A similar obligation applies in relation to an application for a general purpose lease.

The mining warden, in hearing the applications and objections, found that the applicant for the tenements did not comply with the relevant requirements to accompany the mining lease and general purpose lease applications with the additional information. Despite this, the warden recommended the applications for grant subject to conditions.

The question for the High Court to decide is whether a failure to comply with this procedural requirement at the time of lodgement is grounds to find that the recommendation of a mining warden in relation to the mining lease and general purpose lease applications is a nullity, and therefore the Minister lacked a required precondition to making a grant. If the Court decides that contemporaneous lodgement is required for the warden to make a recommendation, then it appears likely that any granted mining and general purpose leases that are affected by this defect will be liable to be declared invalid by a Court and may not be protected by the section 116(2) ‘indefeasibility of title’ provision.

What should we do?

The first step is to understand whether tenement holders have:

  • any granted tenements whose applications were not accompanied by the necessary additional information (ie that information was lodged at some later time); or
  • tenement applications before the Minister and yet to be granted which were not accompanied by the necessary additional information.

If the High Court’s judgment brings into question the validity of granted tenements whose applications were not accompanied by the necessary additional information, then a risk arises that a Court will declare such a tenement invalid. Invalidity would mean that the land the subject of the invalid tenement would be open for mining and any 3rd party could apply for tenure over it. While it is likely that the Minister would use the provisions of s111A of the Mining Act to protect incumbent interests (ie by declining all competing applications), it might be overall too high a risk to rely only on this discretion.  To protect existing rights a tenement holder could apply for tenure over the potentially invalid tenements as a holding position (ie to ensure that any application by a 3rd party would be 2nd in time). An assessment would then need to be made as to what next steps are necessary to maintain rights over the land.

Similarly, any tenement applications before the Minister that are yet to be granted and that were not accompanied by the necessary additional information would not be considered by the Minister for grant. It may be possible in these circumstances to also lodge a fresh tenement application over the land.

This issue is one that may have far reaching consequences. Tenement holders should be alive to the possible outcomes and keep an eye out for the Court’s decision when it is handed down.

We will, of course, be publishing a note when the decision is delivered.

Insight By
Guy Greer
Lawyer
+61 8 9413 8436
+61 403 328 088
Image of Marshall McKenna
Partner
+61 8 9413 8410
+61 411 518 778

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