East New Britain Provincial Government v Nekital [2013] PGNC 212; N5430 (27 November 2013)

N5430

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS (JR) NO 775 OF 2012

BETWEEN

EAST NEW BRITAIN PROVINCIAL GOVERNMENT
First Applicant

AND

URAMOT COMPANY LIMITED
Second Applicant

AND

STAN NEKITAL, Registrar of Tenements
First Respondent

AND

NELLIE JAMES,
Secretary of the Department of Mining & Chairperson of the Mining Advisory Board
Second Respondent

AND

MINERAL RESOURCES AUTHORITY
Third Respondent

AND

BYRON CHAN, Minister for Mining
Fourth Respondent

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Respondent

AND
NEW GUINEA GOLD LIMITED (1-18903)
Sixth Respondent

AND

GOLDMINES OF NIUGINI HOLDINGS PTY LIMITED
Seventh Respondent

Waigani: Makail, J
2013: 23rd October & 27th November

JUDICIAL REVIEW – Application for judicial review – Review of decision of Minister – Extension of term of mining lease – Procedure for extension of term of mining lease discussed – Mandatory – Requirement to give notice – Notice to Provincial Government – Notice must be placed or delivered to District Office and Sub-District Office – Advertisement of notice in newspaper – Whether notice given – Objections to extension must be given – Requirement for Mining Warden hearing – Mining Warden Report – Recommendation by Mining Advisory Board to Minister – Breaches of – Unreasonableness of decision – Effect of – Decision of Minister void – Mining Act, 1992 – ss. 46, 96-110 – National Court Rules – O 16, r 1(1) & 9(4).

Facts

This is an application for judicial review of the decision of the Minister for Mining to extend the term of a mining lease of New Guinea Gold Limited the sixth respondent in this proceeding on 17th May 2012 pursuant to O, 16 of the National Court Rules.

Held:

1. The procedure for extension of a term of a mining lease is set out in ss. 46 and 96-110 of the Mining Act, 1992. The procedure outlined above can be summarised as follows:

(a) The Registrar receives the tenement holder's application to extend the term of the mining lease;

(b) The Registrar gives notice of the tenement holder's application to relevant interested parties;

(c) The Registrar receives objections;

(d) A Mining Warden hearing is held for interested parties including the tenement holder to express their views;

(e) The Mining Warden presents a report to the Mining Advisory Board;

(f) The Mining Advisory Board makes recommendation to the Minister; and

(g) The Minister makes a decision.

2. The first respondent gave notice of the sixth respondent's application to extend the terms of the mining lease to the applicants and relevant interested parties but failed to:

(a) publish a copy in the National Gazette, advertise in the newspapers and sent to the District Office and Sub-District Office where the project is located; and

(b) hold a Mining Warden hearing for the applicants, interested parties including the tenement holder to express their views; and

(c) present a Mining Warden report to the Mining Advisory Board; and

(d) submit a recommendation to the Minister.

3. Based on these breaches, the Minister acted unilaterally in granting extension of the term of the mining lease, these breaches, being so serious and significant have tainted the decision of the Minister resulting in the decision being void and quashed.

4. The Minister's decision is also unreasonable because in addition to failing to address or adequately addressing the outstanding landowners' royalty monies and compensation issues for the use of their land, he failed to consider the technical and financial reports from the sixth respondent and the seventh respondent.

5. The application for judicial review is upheld and the decision of the Minister for Mining to grant an extension of term of the mining lease to the sixth respondent is quashed.

Cases cited:

Kekedo -v- Burns Philip (PNG) Limited [1988-89] PNGLR 122
The State & Tolukuma Gold Mines Limited -v- Central Provincial Government (2009) SC977
Mision Asiki -v- Manasupe Zurenuoc, Morobe Provincial Administration & The State (2005) SC797

Counsel:

Mr N Kera, for Applicants
Ms D Aikung, for First, Second & Third Respondents
Mr E Geita with Mr J Saka, for Fourth & Fifth Respondents
Mr J Nalawaku, for Sixth Respondent
No appearance, for Seventh Respondent

JUDGMENT

27th November, 2013

1. MAKAIL, J: This is an application for judicial review of the decision of the Minister for Mining to extend the term of a mining lease of New Guinea Gold Limited the sixth respondent in this proceeding on 17th May 2012 pursuant to O 16 of the National Court Rules. The procedure for extension of a term of a mining lease is set out in ss. 46 and 96-110 of the Mining Act 1992.

Undisputed Facts

2. From the various affidavits tendered by the parties at trial and marked exhibits "P1" to "P5" and "D1" to D2"in the review book, the undisputed facts are; in 1996, the State through the Minister for Mining granted a mining lease no. 122 to Macmin (PNG) Limited for the Mt Sinivit Mining Project located in the Pomio and Gazelle Districts of the East New Britain Province. Subsequently, Macmin changed its name to the sixth respondent. The lease is presently held by the sixth respondent and its joint venture partner Goldmines of Niugini Holdings Pty Limited ("GNHL") the seventh respondent in this proceeding. The sixth respondent holds 90% of the mining lease and the seventh respondent holds 10%.

3. Shortly after the grant of the mining lease, these two respondent companies entered into a memorandum of agreement ("MOA") with the first applicant, the landowners through the second applicant and the fifth respondent. Under the MOA, the first applicant and the landowners through the second applicant as a landowner company would among others, receive royalty monies, equity participation and spin-off business opportunities from this project.

4. In 2004, the mining lease was extended for a further five years. Prior to its expiry on 15th February 2012, on 01st August 2011, the sixth respondent lodged an application for extension with the first respondent. On 17th May 2012, the fourth respondent granted an extension for a further ten years retrospective to 15th February 2012.

Disputed Facts

5. The main dispute is whether notice was given to the applicants and landowners of the sixth respondent's application to extend the term of the mining lease. Mr Benedick Killian, Mr Akuila Tubal and Mr Boniface Setavo on behalf of the first applicant alleged that the first applicant did not receive notice of the application from the first respondent and Mr Douglas Augustine and Mr Eric Dorman on behalf the second applicant and landowners alleged that they also did not receive the notice. As a result, they were not aware of the sixth respondent's intention to extend the term of the mining lease and did not raise objection.

6. The first respondent strongly refuted the applicants' claim and said that he sent letters to the Governor and Administrator of the province dated 25th January 2012 and in those letters, he enclosed a copy of the sixth respondent's application for extension and also informed them of the Mining Warden hearing at Warongoi Council Chamber on 08th February 2012 at 10:00 am. For this reason, they were aware of the sixth respondent's intention to extend the term of the mining lease and indeed had representatives from the Provincial Government including the Deputy Governor Mr Setavo and landowners at the Mining Warden hearing and they expressed their views for and against the extension. To verify his assertion, he produced a copy of a report by the Chief Mining Warden Mr Kota Timothy which showed that Mr Setavo, Mr Dorman including a good number of landowners attended the hearings.

7. The Project Coordinator for Sinivit Gold Mine Project Mr Marika Tako said that there were "residual concerns" over the mine expressed by the applicants and Sinivit area landowners during the adjourned Mining Warden hearing in February 2012. He does not specify the concerns but said that after subsequent lobbying to the Minister, the Mining Advisory Board recommended to the Minister to renew the mining lease on terms and conditions intended to address those concerns. The Minister accepted the recommendations and incorporated them into the extended mining lease for the benefit of the applicants and landowners.

8. He further said that three conditions were given when the term of the mining lease was extended and one of them was for the sixth respondent to implement a new and efficient ore processing system within twenty-four months. He has been advised that work is currently underway to implement it.

Grounds of Review

9. The applicants' main ground of review is that the respondents failed to comply with the procedure for extension of a term of the mining lease under the Mining Act 1992 particularly the requirement to give notice of the application to them. If they had been given notice, they would have raised objections to the extension. They would have objected to the extension on the following grounds:

(a) failure by the fifth and sixth respondents to meet their obligations under the MOA;

(b) dishonesty and misrepresentation on the part of the sixth respondent;

(c) merger of the sixth respondent with a foreign company; and

(d) insolvent trading of the seventh respondent, hence the second applicant's 25% shareholding in the seventh respondent (equity participation) now a liability.

10. They also alleged that they were not aware of the sixth respondent's intention to extend the term of the mining lease because no notice was published in the National Gazette. The other specific requirement which the applicants alleged was not complied with is the Mining Warden hearing. They alleged that there was no Mining Warden hearing. They alleged that these breaches resulted in the Minister unilaterally making a decision to extend the term of the mining lease and for these reasons, the decision was made in breach of the principles of natural justice in that they were denied a right to be heard and secondly, it was unreasonable.

Submissions

11. The applicants submitted that the procedure for extension is mandatory and must be strictly complied with for there to be a valid decision. Failure to comply with any of the requirement will render the decision void. They seek orders to declare void the decision, have it quashed and for the Minister to reconsider the sixth respondent's application strictly in accordance with the procedure set out in the Mining Act 1992.

12. The respondents opposed the reliefs sought by the applicants and submitted that they have complied with the procedure for extension of a term of a mining lease, particularly the requirement to give notice and there is no merit in the applicants' complaint. They submitted that notice was given to the applicants and various interested parties including landowners and their objections and views were received before the Minister made the decision.

13. In any case, if they had not published a notice in the National Gazette, they have substantially complied with the requirements of the Mining Act 1992 particularly the requirement to give notice and such failure does not render void the Minister's decision. In their further alternative submission, they submitted that the issues as to the outstanding royalty monies, equity participation etc, were matters that can be adequately addressed under the MOA and if the applicants were aggrieved by the sixth respondent's failure to adequately address them, it was and is still open to them to sue the sixth respondent for breach of the MOA.

14. Further to these submissions, they question the standing of the applicants in bringing this legal proceeding as the majority of the landowners had attended the Mining Warden hearings and had expressed views for and against the extension before the Mining Warden prepared a report and submitted it to the Mining Advisory Board recommending its extension.

15. Finally, the Minister and the State supported by the respondents submitted that in the event that the Court finds that the decision of the Minister was made in breach of the Mining Act 1992 the Court has discretion to refuse the orders sought by the applicants because since the decision, the mining project has moved on. Serious financial and administrative consequences will arise if the project were stopped.

Issues

16. The issues arising from the undisputed and disputed facts are:

(a) whether the first respondent notified the applicants' of the sixth respondent's application to extend the mining lease;

(b) If he had, whether there was a Mining Warden hearing;

(c) If there was, whether the applicants' objections in relation to the four matters raised above were raised at the hearing; and

(d) If they were, whether the fourth respondent took them into account when he granted the extension of the mining lease.

Procedure for Extension of Mining Lease

17. Judicial review is concerned with the decision making process of a public body in arriving at a particular decision and not the merits of the decision: Kekedo -v- Burns Philip (PNG) Limited [1988-89] PNGLR 122. Here, the applicants ask the Court to review the process by which the Minister's decision to extend the term of the mining lease was arrived at. Under s. 46 of the Mining Act 1992 the Minister may, on application by a holder of a mining lease and after considering a recommendation from the Mining Advisory Board, extend a term of a mining lease. Section 46 is set out in full below:

"46. Extension of term of mining lease.

(1) The Minister may, on the application by the holder of a mining lease and after considering a recommendation from the Board, extend the term of the mining lease for such period or periods each not exceeding 10 years, as the Minister determines.

(2) An application for the extension of the term of a mining lease -

(a) shall be on the prescribed form; and

(b) shall be lodged in triplicate with the prescribed application fee; and

(c) shall be lodged in accordance with the procedures specified in Division VI.1." (Emphasis added).

18. Where an application for extension of a term of mining lease is lodged, the requirements of s. 105 are set in motion. This provision reads:

"105. Time for objections and hearings.

(1) An application for the grant or extension of the term of a tenement shall come before a Warden for hearing.

(2) Within seven days of the acceptance and registration of an application under Section 103(a) the Registrar shall -

(a) confer with the Chief Warden; and

(b) thereafter fix a date, being not less than 30 days after the date on which the application was registered, as the date before which objections to the application may be made; and

(c) fix dates and places for the hearing, such dates being no earlier than seven days and no later than 14 days after the date fixed for objections under Paragraph (b); and

(d) endorse the dates for objections and hearings, and the places for hearings on the application; and

(e) notify the applicant in writing of the dates and places."

19. Briefly, the application must come before a Mining Warden for hearing and before the hearing takes place, the Registrar in consultation with the Chief Mining Warden fixes a date by which objections to the application are to be received and also fix date and place for the hearing. The Registrar must also notify the applicant (tenement holder) in writing of the date and time of the hearing.

20. As to the requirement to give notice, the pertinent provision is s. 106. It states:

"106. Notice of applications.

The Registrar shall, as soon as practicable after his compliance with Section 105(2) -

(a) send a copy of the application to the provincial government or provincial governments in whose province or provinces is situated the land in relation to which the application is made; and

(b) cause a copy of the application to be published in the National Gazette; and

(c) in the case of an application for an alluvial mining lease, a lease for mining purposes, or a mining easement, where the applicant is not the holder of the tenement send a copy of the application to the holder of a tenement on which the application may encroach; and

(d) send or deliver to each District Office and Sub-District Office nearest to the area in relation to which the application is made a copy of the application; and

(e) advertise a copy of the application in a newspaper published in and circulating throughout the country; and

(f) keep a copy of the application continuously posted at the headquarters of the Authority, until the application is determined."

21. This provision requires the Registrar to send a copy of the application to the Provincial Government where the land in which the application is made is located, publish the same notice in the National Gazette, advertise it in the newspaper and send a copy to the District Office and Sub-District Office nearest to the area to which the application is made. But it does not prescribe the mode of service of the copy of the application on the Provincial Government, District Office and Sub-District Office. So we do not know how the copy of the application is sent to these government authorities at the provincial, district and sub-district level. Finally, the Registrar is required to keep a copy of the application continuously posted at the headquarters of the Authority, until the application is determined.

22. The next pertinent provision is s. 107. It states:

"107. Objections.

(1) Any person may object to the grant or extension of the term of a tenement by lodging with the Registrar a written objection before the date fixed by the Registrar under Section 105(2)(b).

(2) On receipt of an objection under Subsection (1), the Registrar shall give a copy thereof to -

(a) the applicant; and

(b) the Executive Officer of the Board; and

(c) keep a copy of the objection continuously posted at the headquarters of the Authority, until the application in respect of which the objection was lodged is determined."

23. This provision is very clear and specific. Any person who objects to the extension of a mining lease must do two things. First, he or she must put the objection in writing and secondly, lodge it with the Registrar before the date fixed by the Registrar. On receipt of the objection, the Registrar must give a copy to the applicant (tenement holder) and Executive Officer of the Mining Advisory Board. He must also keep a copy continuously posted at the headquarters of the Mineral Resources Authority, until the application is determined.

24. After the giving of copies of the application and receiving of objections by the Registrar, the next stage is the hearing before the Mining Warden. Section 108 sets out the procedure for conduct of Mining Warden's hearing. It states:

"108. Conduct of Warden's hearing.

(1) The Warden shall attend at the places and on the dates fixed by the Registrar under Section 105(2) and shall conduct a hearing in accordance with the procedures specified in Subsection (2) and such other procedures as will afford a fair hearing to the applicant, the landholders present at the hearing and such other persons as the Warden considers will be affected by the applicant's programme or proposals.

(2) The Warden shall -

(a) satisfy himself as to the identity of the persons present at the hearing and that they are persons affected by the applicant's programme or proposals; and

(b) allow the applicant to explain his programme for exploration or his proposals for conducting operations ancillary to mining or mining on the land the subject of the application; and

(c) record and assess the views of any landholders present at the hearing concerning the conduct of exploration, operations ancillary to mining or mining on their land; and

(d) record and assess the views of such other persons whom the Warden considers to be affected by the applicant's programme or proposals.

(3) The Warden may adjourn the hearing from time to time and from place to place on such conditions as to costs or otherwise as he thinks fit."

25. The significance of this provision is that the Mining Warden's hearing must be fair. Except for those persons whom the Mining Warden excludes from the hearings, he must hear all, record their views and allow the applicant (tenement holder) to explain its programme for conducting the mining on the land.

26. After conducting the hearing, under s. 109, within 14 days, the Mining Warden is required to submit a report to the Executive Officer of the Mining Advisory Board. The last stage is where the Mining Advisory Board considers the report including other reports submitted to it before recommending to the Minister whether to extend, refuse or defer the decision until it receives further information or revised programmes from the applicant (tenement holder). Section110 states:

"110. Mining Advisory Board recommendation.

(1) The Board shall consider each application for the grant or extension of the term of a tenement and for this purpose shall review and consider the reports submitted under -

(a) Section 103(b)(ii); and

(b) Section 104; and

(c) Section 109,

and any report submitted by a Provincial Government advised of the application under Section 106(a).

(2) The Board shall also consider any objections -

(a) in the case of an application for the grant or extension of the term of -

(i) an alluvial mining lease - received under Section (1); or

(ii) a lease for mining purposes - received under Section 78(1); or

(iii) a mining easement - received under Section 94(1); and

(b) received under Section 107.

(3) The Board shall also consider -

(a) in the case of an application for the grant or extension of the term of an exploration licence - the programme submitted under Section 24; or

(b) in the case of an application for the grant of -

(i) a special mining lease - the proposals submitted under Section 35;

(ii) a mining lease - the proposals submitted under Section 42;

(iii) an alluvial mining lease - the proposals submitted under Section 52;

(iv) a lease for mining purposes - the proposals submitted under Section 70;

(v) a mining easement - the proposals submitted under Section 85.

(4) Unless otherwise provided for in this Act, the Board may, after the consideration required under Subsections (1), (2) and (3) -

(a) recommend the grant or extension of the term of the tenement; or

(b) recommend the refusal of the application; or

(c) defer further consideration of the application and request the applicant to amend the application or to provide further information or revised programmes or proposals as provided for in Sections 26, 43, 53, 71 and 86 within a reasonable time specified by the Board.

(5) Where the Board defers consideration under Subsection (4)(c), the Executive Officer of the Board shall give to the applicant written notification of the requirement of the Board for further information or for a revision of the applicant's programmes or proposals and of the time specified by the Board within which such further information or revised programme or proposals shall be provided.

(6) Where an applicant fails to provide further information or a revised programme or proposals required under this section within the specified time, the Board may recommend refusal of the application."

27. Under this provision, it is important to note that the Mining Advisory Board is the authority that makes one of three recommendations to the Minister. First, the extension of the term of the mining lease, secondly, its refusal and thirdly, its deferment until further information or revised programmes is received from the applicant (tenement holder). Under s. 46, the important matter to note is that the Minister only acts on the recommendation of the Mining Advisory Board.

28. The procedure outlined above can be summarised as follows:

(a) The Registrar receives the tenement holder's application to extend the term of the mining lease;

(b) The Registrar gives notice of the tenement holder's application to relevant interested parties;

(c) The Registrar receives objections;

(d) A Mining Warden hearing is held for interested parties including the tenement holder to express their views;

(e) The Mining Warden presents a report to the Mining Advisory Board;

(f) The Mining Advisory Board makes recommendation to the Minister; and

(g) The Minister makes a decision.

Present Case

29. This is a cumbersome procedure but in my view, it is intended firstly to protect the interests of all parties affected by the mining project and secondly, to ensure that the decision to grant or refuse the extension is transparent. A wide range of issues arise in a mining project. There are environmental issues, financial issues, infrastructure and technical issues, and in Papua New Guinea, landowner issues starting with landownership issues to compensation issues. These are common issues one would find and encounter in any resource project, such as a mining project. Thus, quite contrary to the respondents' submission that these issues are irrelevant, these are some of the many issues that confront parties involved in resource projects in this country and must be adequately and amicably addressed by parties for the benefit of all, and this case is no exception.

30. Issues of landowners' outstanding royalty monies and compensation are usually at the forefront of discussions between project developers, the State and landowners and it is not uncommon to find that they are ongoing issues in the life of the resource project. In a case of a mining lease, when its term is about to expire and the Minister is considering whether or not to renew it, such issues are relevant and must be taken into account. They are not irrelevant, as asserted by the respondents. It is for these reasons that I find the respondents' submission not only without merit but also misconceived.

31. Given that s. 46(2)(c) of the Mining Act states that"[a]n application for an extension of the term of a mining lease ..... shall be lodged in accordance with the procedure specified in Division (Part) (sic) VI" and when it is read together with ss. 96 – 110, I consider that while this case is about an extension of a term of an existing mining lease, the Mining Act does not distinguish between a new or fresh application and an extension application. The same procedure applies. In other words, just because one is a holder of an existing mining lease does not necessarily mean that it will be extended as a matter of course. This is not what the Mining Act says. The holder must go through the whole process again as if it were a new or fresh application.

32. The combine effect of these provisions is that there must not only be consultation but a meaningful and genuine interchange and consideration of views. Consultation here is not the same as a review of the project agreement or MOA. In The State & Tolukuma Gold Mines Limited -v- Central Provincial Government (2009) SC977, the Supreme Court held that there is no requirement to consult the Central Provincial Government before extending the term of the mining lease for Tolukuma Gold Mine. But the Court did not consider the application of ss. 46 & 96-110 of the Mining Act, 1992. These provisions are now under consideration in this review and this is the distinction to be made here.

33. I accept the applicants' submission that the procedure is mandatory and must be strictly complied with. I now consider whether each of these requirements have been complied with.

(a) Receipt of the tenement holder's application to extend the term of the mining lease by the Registrar

34. As to the first requirement, there is no issue that the sixth respondent has complied with it.

(b) Notice of the tenement holder's application to relevant interested parties by the Registrar

35. As to the second requirement, given that s. 106(a) (supra) does not prescribe a mode of service of the application to the Provincial Government, I am satisfied that a copy of the application was served on the first applicant by way of a letter dated 25th January 2012. As to the requirement to publish the copy of the application in the National Gazette under s. 106(b) (supra), given that there is no evidence that it has been published, I am not satisfied that the first respondent has complied with it.

36. As to service on the District Office and Sub-District Office under s.106(d) (supra), given that there is no evidence that a copy of the application was sent to them, I am not satisfied that the first respondent has complied with this requirement. As to the requirement to advertise it in the newspaper under s.106(e) (supra), again, given that there is no evidence that it has been advertised in the newspaper, I am not satisfied that the first respondent complied with this requirement. Finally, as to requirement to keep a copy of the application continuously posted at the headquarters of the Authority, until the application is determined under s. 106(f) (supra), I find that it has not been complied with because there is no evidence that the first respondent has complied with it.

(c) Receipt of objections by the Registrar

37. As to the requirement on objections, I have examined closely the affidavit of the first respondent (exhibit "D1") and have not been able to find a statement that he had fixed a date for objections to be received and that he had received objections by the due date. In the absence of such evidence, I find that the first respondent has failed to comply with this requirement.

(d) Mining Warden hearing is held for the interested parties including the tenement holder to express their views

38. The Mining Warden hearing is the next requirement. The applicants alleged that there was no Mining Warden hearing. The respondents contended otherwise. This is a contested issue. At paragraph 36 of Mr Setavo's affidavit (exhibit "P4"), he stated that he was not present at the meeting because no notice of meeting was given. If this evidence is refuted, then the respondents must establish by appropriate evidence that the applicants including Mr Setavo were present at the meeting.

39. The evidence of the respondents is dismal. The evidence is hearsay because the first respondent does not say in his affidavit that he was present at the Mining Warden hearing. Similarly, the Project Coordinator for Sinivit Gold Mine Project Mr Tako does not say in his affidavit that he was present at that hearing. So how do they know that there was a Mining Warden hearing? It may well be that these matters have come to the first respondent's knowledge in his capacity as the Executive Officer of the Mining Advisory Board but this is as far is he can go to attesting the existence of the Mining Warden report, a copy of which may be found at annexure "E" to his affidavit (exhibit "D1"). As to whether the hearing took place and whether the applicants were present at the hearing are matters beyond his knowledge.

40. The evidence of a Mining Warden hearing should have come from the Chief Mining Warden Mr Timothy for there to be some credibility in the evidence of the respondents. For these reasons, I find as a fact that there was no Mining Warden hearing. Given this finding, I further find that the respondents have failed to comply with the requirement to hold a Mining Warden hearing.

(e) Report by the Mining Warden to the Mining Advisory Board

41. As to this requirement, there is evidence of a Mining Warden report submitted to the Mining Advisory Board and I refer again to the copy of the report at annexure "E" to the affidavit of the first respondent (exhibit "D1"). But as I have found, there is no Mining Warden hearing, so how then could there be a Mining Warden report? The answer is obvious; none. For this reason, I reject this report and find that the respondents have failed to comply with this requirement.

(f) Recommendation by the Mining Advisory Board to the Minister

42. With regards this requirement, it follows from the preceding finding that while the first respondent at paragraph 17 of his affidavit (exhibit "D1") and supported by Mr Tako in his affidavit (exhibit "D2") asserted that the Mining Advisory Board recommended an extension of the term of the mining lease to the Minister on condition that the residual concerns of the applicants be included as terms and conditions of the lease, there is no evidence of a document in a form of a "recommendation" in those terms from the Mining Advisory Board before the Court.

43. I would imagine the recommendation would set out the issues that were considered including the issues of merger of the sixth respondent with a foreign company and insolvent trading of the seventh respondent together with appropriate recommendation to the Minister, in this case, to grant a further extension of the term of the mining lease to the sixth respondent. This document is crucial for the Court to verify the assertion that there is a recommendation to the Minister because there is a serious dispute as to whether the Minister acted on the recommendation of the Mining Advisory Board to extend the term of the mining lease.

44. Evidence of the recommendation should have come from an officer within the Mining Advisory Board, perhaps the Chairperson, in this case the second respondent by virtue of her appointment as Director and Departmental Head of the Department of Mining under ss. 10 & 11(2)(a) of the Mining Act rather than evidence in a general and vague form from Mr Tako asserting that there was a recommendation from the Mining Advisory Board to the Minister to further extend the term of the mining lease. If this document is not forthcoming from the respondents, the reasonable conclusion to be drawn from the evidence is that, there is none. It follows, and I so find, the respondents have failed to comply with this requirement.

(g) Decision by the Minister

45. The process by which the respondents are required to follow to eventually have the Minister reach a decision is a "step by step" process. The importance of the applicants' objection is that the respondents have not addressed or adequately addressed landowner issues since the mining project started. These were outstanding royalty monies and compensation payments for the use of their land. Then, there were outstanding environment issues such as the issue of an efficient ore processing system. The respondents, especially the sixth respondent have not denied these assertions. The other issues were dishonesty and misrepresentation on the part of the sixth respondent in failing to disclose a move to merge with a foreign company called PNG Gold Corporation, a company listed on the Canada Stock Exchange and the insolvent trading of the seventh respondent, hence the second applicant's 25% shareholding in the seventh respondent (equity participation) now a liability.

46. Mr Killian and Mr Setavo in their respective affidavits (exhibits "P1" and "P4") stated that up until about April 2012 on the eve of the National Election campaigning period, they had several consultations with the Minister, staff of the Mineral Resources Authority, Provincial Government, landowners and project developer the sixth respondent. The last meeting was attended by the Minister, a staff of the Authority and the Minister's Executive Officer Mr Guise on 14th April 2012 at Gazelle International Hotel, Kokopo in East New Britain Province. This was the only time the respondents seemed to have discussed the issue of merger of the sixth respondent with the foreign company and insolvent trading of the seventh respondent and the Minister assured them that he will look into these matters and would meet with them on the next day. Nothing further came out of this meeting because the Minister had left for Port Moresby early on the next day.

47. Despite this set back, they wrote to the Minister objecting to the extension until a full review of the mining project and outstanding issues were undertaken. That was on 22nd May 2012. By then, it was too late because the Minister had extended the term of the mining lease on 17th May 2012. The respondents have not denied these matters except to say that all landowners including the applicants were consulted at the Mining Warden hearing and that the applicants have no standing to bring this proceeding.

48. On the evidence before the Court, I find that these issues were outstanding and the applicants have standing to raise them because firstly the project is in East New Britain Province of which the first applicant is the responsible Provincial Government and secondly, the second applicant is one of the parties to the MOA but were raised outside the process prescribed by the Mining Act 1992. In other words, the Minister by-passed the legitimate process and extended the term of the mining lease. I uphold the first ground of review.

49. Even if I were to find that there was a Mining Warden hearing and a report was presented by the Mining Warden to the Mining Advisory Board and subsequently, a recommendation to the Minister to extend the term of the mining lease, I would find against the respondents on the second ground because the decision is unreasonable. It is unreasonable because in addition to the outstanding royalty monies and compensation issues not being addressed or adequately addressed by the respondents, there is no evidence of reports on the technical and financial aspects of the project from the sixth and seventh respondents before the Court to address firstly the environmental issue raised by the applicants in relation to the ore processing facility and secondly, their financial capacity to continue to run the project.

50. In my view these are relevant matters and ought to be considered in an application for extension, especially where the applicants have raised serious allegations in relation to the sixth and seventh respondents' financial capacity to continue to run the project. I conclude that they were not taken into account by the Minister.

Remedy

51. I accept that even if an application for judicial review is upheld, the Court still retains the discretion not to grant the reliefs sought by an applicant: Mision Asiki -v- Manasupe Zurenuoc, Morobe Provincial Government & The State (2005) SC797. The submission by the Minister and the State that the mining project has moved on and serious financial and administrative consequences will result if the decision of the Minister is quashed is relevant. It becomes more crucial where a restraining order is being sought to stop the project. But they have not pointed specifically to how the project will be adversely affected if the Minister's decision is quashed. Evidence should come from them, preferably from the sixth respondent as the adverse effect the quashing of the Minister's decision will have on the project, financially and administratively. There is absolutely no evidence of these matters before the Court.

52. Even if there is evidence, the Court cannot simply ignore the breaches of the statutory requirements especially where they are flagrant and gross for the sake of financial and administrative convenience of one party. The Court must balance them and make a decision. In this case, I find the failure by the respondents, particularly the failure by the first respondent and the Mining Warden to comply with the requirements in relation to extension of the term of the mining lease, particularly the requirements by the Mining Warden to submit a report to the Mining Advisory Board and the latter submitting a recommendation to the Minister for decision flagrant and grossly breaches of the Mining Act 1992.

53. Based on these breaches, I find that the Minister acted unilaterally to grant extension of the term of the mining lease. I further find that these breaches, being so serious and significant have tainted the decision of the Minister. The effect of these breaches is that the Minister's decision is void and must be quashed. It is also unreasonable, and must be quashed and the application for extension must be remitted for reconsideration by Minister pursuant to O 16, r 9(4) of the National Court Rules.

Orders
54. The orders are:

1. The application for judicial review is upheld.

2. A declaration that the decision of the fourth respondent to grant an extension of the mining lease no. 122 to the sixth respondent on 17th May 2012 is in breach of the requirements and processes prescribed by the provisions of Part VI of the Mining Act 1992 and therefore, null and void.

3. An order in the nature of certiorari to remove into the Court and quash the decision of the fourth respondent to grant an extension of the mining lease no. 122 to the sixth respondent on 17th May 2012.

4. An order in the nature of mandamus requiring the first respondent, second respondent, third respondent and fourth respondent to rescind the decision to renew mining lease no. 122 and to reconsider and determine the sixth respondent's application for extension in accordance with the Mining Act, 1992.

5. An injunction restraining the respondents from acting further on the extended mining lease no. 122 until the reconsideration of the sixth respondent's application for extension is determined.

6. The respondents shall pay the costs of the proceedings on a party/party basis to be taxed, if not agreed.
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Young & Williams Lawyers: Lawyers for the Applicants
In-house Counsel: Lawyers for the First, Second & Third Respondents
Acting Solicitor-General: Lawyers for the Fourth & Fifth Respondents
Namani Lawyers: Lawyers for the Sixth Respondent