High Court applies strict compliance test under the Mining Act 1978 (WA) and raises doubts regarding tenement validity –remedial legislative response required

In its recent decision in Forrest & Forrest v Wilson [2017] HCA 30, the High Court held that a failure to strictly comply with the technical lodgements requirements of the Mining Act 1978 (WA) (Mining Act) invalidated a decision of the Mining Warden to recommend that a number of mining leases be granted. This overturned two decisions of the Western Australia Supreme Court (at hearing and on appeal) which reached an opposite conclusion.

It also departed from the generally understood position that a mining lease, once granted, conferred on the holder an 'indefeasible' mining title that cannot be the subject of subsequent legal challenge on the basis that the tenement was invalidly granted.

This has created unnecessary and unhelpful legal uncertainty regarding the validity of a significant number of mining tenements in Western Australia which were affected by the same procedure defect considered in the Forrest v Wilson.

The Western Australia Government announced it is exploring a legislative fix to resolve the potential uncertainty created by the Forrest v Wilson decision. We would encourage the Western Australia Government to do so at the earliest opportunity for the benefit of all miners who have made significant investments in the Western Australia mining sector.

The case

Two applicants applied for mining leases within the boundaries of the 'Minderoo' pastoral lease. Under the Mining Act it is a requirement that a 'mineralisation report' is lodged contemporaneously with the mining lease application.

This requirement was not strictly followed, as the mineralisation reports were lodged after the mining lease application but before the Mining Warden made its recommendation to the Minister concerning the grant of the tenements the subject of the application. We understand that late lodgement of mineralisation reports was a relatively common practice.

The High Court (overturning the first instance and court of appeal decision of the Supreme Court of Western Australia) held that as a consequence of this technical non-compliance the Mining Warden did not have jurisdiction to make a recommendation under the Mining Act. This made the Mining Warden's subsequent recommendation to grant the tenements legally invalid.

No orders were made regarding the validity of the tenements, as the tenements were not granted by the Minister in that case pending the resolution of the legal proceedings.

What does this mean?

The Forrest v Wilson decision does not have any immediate impact on the validity of tenements that have been granted. As although the decision may support a conclusion that jurisdictional error has ‘tainted’ the grant of the tenements (ie where a mining tenement has been granted despite the application not strictly complying with the Mining Act), that grant remains effective until such time that a court makes orders quashing the decision to grant the tenement.¹

However, the High Court's decision creates unnecessary and unhelpful legal uncertainty in relation to tenements that were granted following a defective application. Although a number of issues would need to be overcome before a court would order that tenements granted based on a defective application are invalid, the High Court's decision in Forrest v Wilson creates uncertainty on this point where previously there was none.

It is also likely to increase the work-load of the Western Australia Department of Mines and Petroleum due to the need to respond to a large number of queries from concerned tenement holders.

Those currently preparing mining lease applications should ensure that all procedural requirements in the Mining Act are strictly adhered to avoid the issues raised by the Forrest v Wilson decision.

What next?

The State Government has recently indicated its intention to rectify the issues raised by the High Court's decision in Forrest v Wilson. In a statement released on 5 September 2017, the Minister for Mines and Petroleum stated that the Western Australian Government is ‘acting swiftly to ensure certainty and security of mining operations’ and that the government was exploring legislative solutions, potentially with retrospective operation'.²

Until this happens, the indefeasibility of mining tenements granted under the Mining Act in Western Australia will remain less certain than was previously understood to be the case.

We recommend remedial legislation is enacted as soon as possible to preserve Western Australia's reputation as a jurisdiction which is supportive of mining investment.

Endnotes

1. Wattmaster Alco Pty Ltd v Button (1986) 70 ALR 330 at 335 (Sheppard and Wilcox JJ).
2. McGowan Government examining solutions for miners.