D'Aguilar Gold Ltd v Gympie Eldorado Mining Pty Ltd [2005] QLRT 156

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: D’Aguilar Gold Ltd v Gympie Eldorado Mining Pty Ltd [2005] QLRT 156 PARTIES: D’Aguilar Gold Ltd (Applicant/Respondent) v Gympie Eldorado Mining Pty Ltd (Respondent/Applicant) FILE NO: MRAA158/05 PROCEEDING: Application to strike out claim DELIVERED ON: 28 November 2005 DELIVERED AT: Brisbane HEARING DATE: 24 November 2005 MEMBER: Koppenol P ORDER/S: 1. Respondent/Applicant’s application struck out. (at [16]) 2. No order as to costs. (at [16]) CATCHWORDS: MINING – JURISDICTION OF TRIBUNAL – STRIKE OUT APPLICATION – EXPLORATION PERMIT – AGREEMENT TO USE AND ENJOY SUB-BLOCKS – ASSIGNMENT OF EPM – whether claim that assignee not bound by agreement constitutes action “arising in relation to” mining or a mining permit – whether claim with respect to right to “possession of or other interest or share in” an exploration permit Mineral Resources Act 1989, ss 126, 363(1)(b), (2)(a) Land and Resources Tribunal Act 1999, s. 50 O’Grady v Northern Queensland Co Ltd (1990) 169 CLR 356, applied General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, applied WMC Resources Ltd v Leighton Contractors Pty Ltd (1999) 20 WAR 489 (FC), followed International Oil Lease Service Corp v Australian Energy Ltd [1991] 2 Qd R 166, referred to -- 1 of 5 -- Evdo Pty Ltd & Ors v Meyer (2001) 79 SASR 9 (FC), referred to COUNSEL: P. Dunning SC for Applicant/Respondent T. Alford for Respondent/Applicant SOLICITORS: Hopgood Ganim for Applicant/Respondent Z. Farmer for Respondent/Applicant Application [1] This is an application by the respondent (Applicant/Respondent) to strike out the applicant’s (Respondent/Applicant) claim. The applicant seeks certain declaratory orders and the respondent submits that the Tribunal does not have jurisdiction to hear the applicant’s claim. Background [2] On 5 June 2003, the respondent entered into a written agreement (agreement) with Gympie Eldorado Goldmines Pty Ltd (seller), under which the respondent was granted various rights of use and enjoyment with respect to 6 sub-blocks1 on Exploration Permit for Minerals No 6031 (EPM 6031) which was held by the seller. Subsequently, receivers and managers were appointed to the seller and they assigned EPM 6031 to the applicant. [3] A dispute later emerged when the respondent proposed to exercise the rights conferred and the applicant maintained that it was still the sole legal and beneficial owner of the 6 sub-blocks and was not bound by the agreement. The applicant then filed an application in the Tribunal seeking orders to that effect. Submissions [4] The applicant’s claim was based on section 363(1) and (2)(a) of the Mineral Resources Act 1989 (MRA). That section provides as follows: “Division 2 The tribunal 363 Substantive jurisdiction (1) The tribunal shall have jurisdiction to hear and determine actions, suits and proceedings arising in relation to prospecting, exploration or mining or to any permit, claim, licence or lease granted or issued under this Act or any other Act relating to mining. (2) Without limiting the generality of subsection (1), the tribunal shall have jurisdiction to hear and determine actions, suits and proceedings with respect to— (a) the right to possession of or other interest or share in any mining claim, exploration permit, mineral development licence or mining lease; … .” 1 As defined in Mineral Resources Act 1989, section 126. -- 2 of 5 -- [5] The respondent’s argument was that the applicant’s claim for declaratory relief was not: (a) one “arising in relation to” mining or to any permit granted or issued under the MRA (in terms of section 363(1)); or (b) an action, suit or proceeding with respect to the right of “possession of or other interest or share in” any exploration permit (in terms of section 363(2)(a)). The applicant argued that its action fell within each of those provisions. [6] In O’Grady v Northern Queensland Co Ltd,2 the holders of a mining lease (sellers) agreed to sell a 60% interest in it to a buyer. The sellers subsequently purported to rescind the agreement and sought a declaration that the agreement had been terminated. The buyer counterclaimed for a declaration that the purported rescission was invalid and for orders appointing a joint venture committee. Relevantly for present purposes, the question for the High Court was whether the counterclaim was an action “arising in relation to mining” within a section of the Mining Act 1968 (Qld) which corresponds to section 363(1) of the MRA. The majority held that it was not. Toohey and Gaudron JJ (with whom Dawson J agreed) said that “arising in relation to” mining presupposes a direct connection between a presently existing action and mining or a mining tenement.3 After commenting that the counterclaim was distinguishable from a claim for specific performance of a contract for sale of a mining tenement or for an order for sale of such a tenement,4 their Honours concluded that:5 “Although the agreement in question concerned mining a mineral lease, it was the validity of purported rescissions of the agreement and the appointment of a joint venture committee that was directly at issued in the counterclaim.” [7] Accordingly a claim for a declaration that a purported rescission of an agreement to sell an interest in a mining lease was invalid does not fall within section 363(1) of the MRA. [8] The respondent submitted that the applicant’s claim was really a species of the O’Grady counterclaim, in that it was a matter of contract law and statutory interpretation (albeit of the MRA) as to whether the subject agreement was valid. [9] The applicant argued that there was the requisite direct connection in the present case—which was whether there had been a valid assignment to the respondent of an interest in the EPM. It was also said that although some questions of contract law and property law were involved, numerous provisions of the MRA would have to be considered when determining the matter. Accordingly the claim was a claim arising in relation to mining or a statutory permit.. Analysis [10] In my opinion, the respondent’s argument is clearly correct. Mining contracts do not constitute a discrete and different branch of the law to which ordinary principles of 2 (1990) 169 CLR 356. 3 At 367, 374, 375. 4 At 374. 5 At 375. -- 3 of 5 -- the law of contract and the general law are not applicable.6 That is the case, notwithstanding that some (perhaps extensive) reference to statutory provisions is required in that process. The claim here is that an agreement conferring certain rights of use and enjoyment in respect of a mining tenement does not bind a third party. Although the agreement certainly concerned mining and a mining tenement, it is the capacity of the agreement to bind the applicant which is directly at issue in the applicant’s claim. Thus as Dawson J (a member of the majority) explained in O’Grady:7 “A contract may deal with mining or a mining tenement, but proceedings arising out of the contract may raise only questions of personal obligations under a contract rather than questions related to mining or a mining tenement.” [11] Later cases applying O’Grady further illustrate the principle: a claim to mining royalties does not arise in relation to mining,8 nor does a claim for mining partnership expenses.9 They are claims about personal obligations under a contract, albeit that the contract concerns mining or a mining tenement. So too, in my opinion, is the applicant’s claim in the present case. [12] The applicant also relied upon section 363(2)(a) of the MRA. The agreement provides relevantly as follows: [emphasis added] “4.1 As of the Completion Date the seller agrees to: (a) sell and assign to the Buyer and the Buyer shall purchase and accept from the Seller its interest in the Sale Tenements free from encumbrances; (b) grant to Buyer until such time as Buyer is able to become the registered holder the following rights of use and enjoyment in respect of the Portion of Tenement EPM 6031 namely; (i) the sole and exclusive right and at its sole risk and expense to carry out exploration for and to extract Minerals within the Portion of Tenement EPM 6031 in accordance with the Act and any applicable environmental authorities, plants, programs or other legislative requirements; (ii) at its sole discretion, to reduce the area of Portion of Tenement EPM 6031 by excluding from this Agreement any of Portion of Tenement EPM 6031 if the expenditure by Buyer upon the Portion of Tenement EPM 6031 be excluded equals or exceeds the expenditure obligation in respect of such of Portion of Tenement EPM 6031 as set by the Minister. Upon such a reduction Buyer shall cease to have any interest in any part of Portion of Tenement EPM 6031 so excluded and any reference in this Agreement to Portion of Tenement EPM 6031 shall be taken to be a reference to the Portion of Tenement EPM 6031 as so reduced; (iii) to carry out all exploration in Portion of Tenement EPM 6031 and determine all exploration and evaluation programmes on Portion of Tenement EPM 6031; (iv) subject to complying with all laws, acts, rules, orders and regulations governing its activities on Portion of Tenement EPM 6031 expend monies which are reasonably required in respect of the Portion of Tenement EPM 6031 and when taken as a proportion of all expenditure required on EPM 6031, will facilitate renewal of EPM 6031 by Seller. Buyer agrees that it shall present such programmes and budgets with such guarantees as are appropriate so as to provide reasonable support to Seller so as to ensure the success of the 6 WMC Resources Ltd v Leighton Contractors Pty Ltd (1999) 20 WAR 489 at [42] (FC). 7 At 367. 8 International Oil Lease Service Corp v Australian Energy Ltd [1991] 2 QdR 166, 169. 9 Evdo Pty Ltd & Ors v Meyer (2001) 79 SASR 9 at [22]-[23] (FC). -- 4 of 5 -- applications by the Seller to have the period of Portion of Tenement EPM 6031 extended. (v) at any time, assign, transfer, sell, mortgage or otherwise deal with the whole or part of its right, title or interest in and to Portion of Tenement EPM 6031 under this Agreement provided that buy any such assignment, transfer, sale, mortgage or dealing will be: (A) subject to the rights of the Seller under this Agreement; and (B) the Buyer as a condition of any such assignment, transfer, sale, mortgage or other dealing procuring the execution by any assignee, transferee, buyer, mortgagee or other person of a deed whereby the assignee, transferee, buyer, mortgagee or other persons covenants to be bound by all the terms and conditions of this Agreement; (vi) do all acts and things reasonably required to provide Buyer with full beneficial ownership and enjoyment of Portion of Tenement EPM 6031 as if it were the registered holder; … .” [13] In my view, clause 4.1 makes it clear that only rights of use and enjoyment (in the 6 sub-blocks on the EPM) are the subject of the agreement—albeit rights which might later mature into an interest. On that basis, the applicant’s claim is not one with respect to the right to possession of or other interest or share in an exploration permit, as required by section 363(2)(a). Disposition [14] I am satisfied that upon analysis, the applicant’s claim clearly10 falls outside section 363(1) and (2)(a), such that the Tribunal does not have jurisdiction to hear it. There will therefore be an order that it be struck out. Costs [15] The respondent sought costs. Costs can only be awarded in such a case if special circumstances are present.11 This case ultimately turned upon the principles established in the judgments in O’Grady—and it was the Tribunal which drew O’Grady to the parties’ attention after written submissions had been filed and on the afternoon before the hearing. In those circumstances, and despite my granting the respondent’s strike out application, I do not consider that special circumstances are present such that I could make the order for costs sought. There will be no order as to costs. Orders [16] The orders that I make are as follows: 1. Respondent/Applicant’s application struck out. 2. No order as to costs. 10 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. 11 Land and Resources Tribunal Act 1999, section 50. -- 5 of 5 --