[2015] WAMW 7 · 2020-06-02 · OZMINEX PTY LTD V NEAROLOGY PTY LTD [2015] WAMW 7 Page 1. ... (Northern Yarri Mining Pty Ltd v Eaglefield Holdings Pty Ltd [2010] WASCA 132 Result:

[2015] WAMW 7

JURISDICTION : MINING WARDEN

LOCATION

CITATION

CORAM

: PERTH

: OZMINEX PTY LTD v NEAROLOGY PTY LTD[2015] WAMW 7

: ZEMPILAS M

HEARD : ON THE PAPERS

DELIVERED : 8 MAY 2015

FILE NO/S APPLICATION FOR EXPLORATION LICENCE53/1792OBJECTION 433737

BETWEEN : OZMINEX PTY LTD(Applicant)

AND

NEAROLOGY PTY LTD(Objector)

Caÿhworÿ:

APPLICATION - Exploration License - Obj ection - Section 69(1) Mining Act

Legislation:

s. 8, s. 57, s. 59, s. 67, s. 69 MiningAet 1978 (WA)s. 9 Corporations Act 2001 (Cth)

Cases cited:

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

OZMINEX PTY LTD V NEAROLOGY PTY LTD [2015] WAMW 7 Page 1

Alcan (NT) Alumina Pty Ltd v.Territory) [2009] HCA 41

I [20151WAMW 7 I

Commissioner of Territory Revenue (Northern

Yarri Mining Pty Ltd v Eaglefield Holdings Pty Ltd [2010] WASCA 132

Result:

1. Application E53/1792 recommended for refusal by the Minister pursuant

to s. 59(5) Mining Act 1978.

Representation:

Counsel."

Applicant • In personObjector • Ms A Hedgcock

Solicitors."

ApplicantObjector

In personDLA Piper Australia

Introduction

1• This is an application for an Exploration Licence dated 23 September2013 by Ozminex Pty Ltd ("Ozminex") in respect of 39 graticular blocks("Application")•

, On 22 October 2013 Nearology Pty Ltd ("Nearology") applied for anExploration Licence over similar ground (E53/1799) and lodged objection433737 to E53/1792 the following day.

, The basis of the objection is:

1. Application for Exploration Licence 53/1792 (Application) doesnot comply with the Mining Act 1978 (WA).


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2. In particular, the Application contravenes and/or circumventssection 69 of the Mining Act 1978 (WA) in that:

2.1 The Application includes land previously the subject ofE53/1044.

.

4,

2.2 Echo Resources Ltd was the registered holder of E53/1044.

2.3 A portion of E53/1044 expired on 21 September 2013. Theremainder of E53/1044 expired on 21 October 2013.

2.4 Ozminex Pty Ltd applied for E53/1792 on 23 September2013.

2.5 As at all relevant dates, including 21 September 2013, 23September 2013 and 21 October 2013, Mr Ernst Kohlerwas a director of Ozminex Pty Ltd.

2.6 As at all relevant dates, including 21 September 2013, 23September 2013 and 21 October 2013, Mr Ernst Kohlerwas a director of Echo Resources Ltd.

3. In the circumstances, the Application should be refused pursuant

to:

3.1 section 59 of the Mining Act 1978 (WA); and/or

3.2 section 111A of the Mining Act 1978 (WA).

Mr Ernst Kohler has appeared as a representative of Ozminex in theseproceedings. It is not in issue he was at all material times a director of

both Ozminex and Echo Resources Ltd ("Echo").

On 5 December 2014, programming orders were made for the filing ofevidence and submissions by the parties and, by consent of the parties, itwas ordered the application be determined on the papers, without the needfor a further hearing.

Background and Law

.Pursuant to s. 59 of the Act, where an objection to an Exploration Licencehas been lodged, the warden shall hear the application and make arecommendation to the Minister to grant or refuse the application. Section

57(3) provides:

(3) The mining registrar or the warden shall not recommendthe grant of an exploration licence under this section unless he


I [2015]WAMW7

is satisfied that the applicant is able to effectively explore theland in respect of which the application has been made.

1

Q Section 69 of the Act provides:

69. Land the subject of exploration licence not to be againmarked out for a certain period

(1) When an exploration licence is surrendered or forfeited, orexpires, or any part of the land the subject of the licence is surrenderedin accordance with section 65, the land the subject of the licence or thepart so surrendered shall not be marked out or applied for as aprospecting licence or an exploration licence --

(a) by or on behalf of the person who was the holder of theexploration licence immediately prior to the date of the surrender,

forfeiture or expiry; or

(b) by or on behalf of any person who had an interest in theexploration licence immediately prior to that date; or

(c) by or on behalf of any person who is related to a person referred

to in paragraph (a) or (b),

within a period of 3 months from and including that date.(2) For the purposes of subsection (1) the holding of shares in alisted public company which held the exploration licence in questiondoes not of itself constitute an interest in the exploration licence.

° "Related" is defined in s. 8(4) of the act:

(4) For the purposes of this Act a person is related to --

(a) an individual, if the person is --

(i) a spouse or de facto partner; or

(ii) a parent, grandparent or great-grandparent; or

(iii) a child, grandchild or great-grandchild; or

(iv) a sibling,of the individual, whether the relationship is a step relationship or arelationship established by, or traced through marriage or a de factorelationship, a written law or a natural relationship; and

(b) a body corporate, if the person is a related entity (as definedin section 9 of the Corporations Act) in relation to the body

corporate.

9, Section 9 Corporations Act 2001 (Cth) provides:related entity, in relation to a body corporate, means any of thefollowing:

(a) a promoter of the body;


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(b) a relative of such a promoter;

(c) a relative of a spouse of such a promoter;

(d) a director or member of the body or of a related body corporate;

(e) a relative of such a director or member;

(f) a relative of a spouse of such a director or member;

(g) a body corporate that is related to the first-mentioned body;

(h) a beneficiary under a trust of which the first-mentioned body is orhas at any time been a trustee;

(i) a relative of such a beneficiary;

(j) a relative of a spouse of such a beneficiary;

(k) a body corporate one of whose directors is also a director of thefirst-mentioned body;

(1) a trustee of a trust under which a person is a beneficiary, where theperson is a related entity of the first-mentioned body because of anyother application or applications of this definition.

10. At all relevant times, Echo was the holder of E53/1044. On 3 February2006, Echo lodged application M53/1084 which related to the conversionof 11 graticular blocks the subject ofE53/1044.

11. On 21 September 2013 E53/1044 expired, except for the 11 graticularblocks the subject of M53/1084 which continued to be subject to theunderlying exploration licence pursuant to s. 67(2) of the Act.

12. On 23 September 2013 Ozminex lodged the Application over 39graticular blocks. 11 of those 39 graticular blocks are the subject ofM53/1084.38 of those 39 graticular blocks were previously the subject ofE53/1044.

13. On 21 October 2013 M53/1084 was withdrawn.

14. About the Application, Nearology says it ought to be recommended forrefusal on the basis that;

(i) 11 out of 39 graticular blocks were the subject ofM53/1084 on thedate of Application, therefore the land the subject of those blockswas not open for mining, and


I [20151WAMW 7 I

(ii) 38 out of 39 graticular blocks were previously the subject ofE53/1044 held by Echo until 21 September 2013, therefore theApplication by Ozminex, a company of which Mr Kohler is adirector, only two days later over land the subject of an explorationlicence held by Echo, also a company of which Mr Kohler is adirector, contravenes s. 69 of the Act.

15. Ozminex does not take issue that land previously the subject of E53/1044must be excluded from the grant of the Application. This would leave onegraticular block, referred to as WILUNA2244s and parts of othergraticular blocks which lay outside the tenement boundary of E53/1044.Ozminex relies on s.s 57(2d) and (2e) to permit the grant of part of ablock if the rest of the block consists of land that is unavailable for

17.

exploration.

As to s. 69(1), Ozminex simply asserts "Application 53/1792 was notmade for or on behalf of the registered holder ofE53/1044."

18. In relation to s. 57(3), the affidavit of Mr Kohler dated 19 December 2014states "mineral exploration activities will be undertaken by and forOzminex on all land within E53/1792 once granted. Ozminex will use theservices of contractors where required" [11].

Decision

19,

20.

Sections 57(2d) and (2e) permit the grant of part of a graticular block ifthe rest of the block consists of land that is unavailable for exploration,which would assist Ozminex if an issue only arose as to whether the landin question was open for mining or subject to another mining tenement.

However, it does not assist Ozminex if the Application has not compliedwith the Act pursuant to s. 69(1). The unchallenged evidence is Mr Kohleris a director of Ozminex, who made the Application only two days afterthe expiration of E53/1044 which was held by Echo, also a company ofwhich Mr Kohler is a director.

21. In light of the provisions referred to above, in particular s. 9 CorporationsAct, this is a clear contravention of s. 69(1) and goes against the intent ofthe section which is to prevent those closely connected with an existingexploration licence to benefit from that association by making anapplication for an exploration or prospecting licence within 3 months ofsurrender, forfeiture or expiry of the tenement.


[ 12015] WAMW 7

22. Non-compliance with the Act does not invalidate an application for anexploration licence: Project Blue Sky v Australian Broadcasting Authority(1998) 194 CLR 355 and Alcan (NT) Alumina Pty Ltd v Commissioner ofTerritory Revenue (Northern Territory) [2009] HCA 41, adopted in YarriMining Pty Ltd v Eaglefield Holdings Pty Ltd [2010] WASCA 132. In thecontext of an application for an exploration licence I note the following

provisions:• Section 59(6)(b) allows a Minister to grant or refuse an exploration

licence whether the applicant "has or has not complied in allrespects with the provisions of the Act", which contemplatesapplications proceeding to recommendation by the warden evenwhere there has been non-compliance; and

• Section 116(2) provides a mining tenement granted under the Act"shall not be impeached or defeasible by reason or on account of

any informality or irregularity in the application."

23. It is also the case one graticular block (WILUNA2244s) was not land thesubject of E53/1044 so, regardless of non-compliance with s. 69(1), Icould recommend the grant ofE53/1792 in respect of only that block.

24. However, the nature of this contravention is such that I must recommendrefusal of the Application in its entirety, taking into account the following:

(a)

(b)

(c)

(d)

(e)

(f)

The language used in s. 69(1), including use of the words "shallnot" and the precision with which the time frame of 3 months is tobe calculated;The intent of s. 69(1) to prevent advantage (actual or perceived)flowing to Ozminex in respect of the exploration licence previouslyheld by Echo;Ozminex arguably obtained such an advantage in making itsapplication within 2 days of the expiry ofE53/1044;There is a competing application by Nearology for an explorationlicence over the same area which is second in priority with theApplication by Ozminex;There is a real advantage for Ozminex if even partially successfulwith the Application over a rival applicant; andOzminex has not provided evidence upon which I can be satisfied itis able to effectively explore any of the land the subject ofE53/1792.

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Orders

25. Accordingly I make the following order:

1. Application E53/1792 recommended for refusal by the Ministerpursuant to s. 59(5) Mining Act 1978.

Warden


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