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Tex Onsite (PNG) Ltd v Nekitel [2017] PGNC 188; N6781 (31 May 2017)

N6781


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


CIA NO. 18 OF 2017


BETWEEN:
TEX ONSITE (PNG) LIMITED
Appellant


AND:
STANLEY NEKITEL AS THE REGISTRAR OF TENEMENTS
First Respondent


AND:
PHILIP SAMAR IN HIS CAPACITY AS CHAIRMAN AND ON BEHALF OF THE MINING ADVISORY BOARD
Second Respondent


AND:
MINERAL RESOURCES AUTHORITY
Third Respondent


AND:
BYRON CHAN AS MINISTER FOR MINING
Fourth Respondent


AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Respondent


AND:
FRONTIER HOLDINGS LIMITED
Sixth Respondent


AND:
REEKARA LIMITED
Seventh Respondent


Waigani: Nablu, J
2017: 12 & 31 May

APPEAL – Decision of the Registrar of Tenements – ss. 30 and 125, Mining Act – Interpretation – Statutory provision – 30 days moratorium – decisions or other instruments made pursuant to the Mining Act – take effect after registration in the Tenement Register – Appeal dismissed.


Cases cited:
No cases cited.


Counsel:


V. Geroro, for the Appellant
A. Mana, for the First, Second and Third Respondent
E. Geita, for the Fifth Respondent
J. Brooks, for the Seventh Respondent


31 May, 2017


1. NABLU J: Tex Onsite (PNG) Limited appeals against the decision of the Registrar of Tenement to deregister their applications for exploration licences (EL 2474 and EL 2475) on the 7th October 2016. The first respondent deregistered the appellant’s applications on the ground that he had erroneously accepted the applications during the mandatory thirty (30) days moratorium period as prescribed in Section 30 of the Mining Act. The first respondent deregistered the appellant’s applications following legal advice and upon the direction of the Managing Director.


2. The appellant relied on the affidavits of John Williamson filed on 28th February 2017, Gibson Wakape filed on 28th February and the affidavit of Desmond Kipa filed on 2nd March 2017. The appellant sought to rely on the affidavit of Gibson Wakape which was filed on 4th May 2017, a few days before the hearing. An objection was raised by counsel for the seventh respondent and the Court ruled that the appellant could not rely on this affidavit because they had not sought leave to include it pursuant to Order 18 Rule 10(3) of the National Court Rules. Therefore, that affidavit was not admitted into evidence.


3. The first respondent filed his affidavit in response on 13th March 2017. The seventh respondent also filed and relied on the affidavit of Tony Bell on 13th March 2017.


4. This appeal appeared to be a straight forward matter, therefore, it was listed for hearing. The requirement for an appeal book was dispensed with. The main issue for determination was a legal issue.


5. The appellant challenged the decision of the Registrar on the following grounds which were contained in the Notice of Appeal.


  1. The first respondent erred in law when it failed to afford the opportunity to the appellant to be heard prior to its decision made on 7th October 2016 in deregistering EL 2474 and EL 2475 registered to the appellant and therefore the first respondent breached the principles of natural justice as enshrined under Section 59 of the Constitution and therefore erred in law.
  2. The acceptance and registration of the appellants applications for Exploration Licence on 4th October 2016 created a legal and equitable interest over the subject area and the deregistration of their Applications was in breach of Section 116 of the Mining Act and therefore an error committed by the first respondent.
  3. The first respondent acted without or in excess of jurisdiction in deregistering the applicants application for Exploration Licences 2474 (comprising 74 sub-blocks) and 2475 (comprising 99 sub-blocks) on 7th October 2016 when the decision whether to rectify the Register of Tenements was conferred on the Director pursuant to Section 125 of the Mining Act 1992 and therefore was ultra vires and an error of law.
  4. The reasoning by the first respondent that the acceptance and registration by the first respondent on 4th October 2016 of the appellant’s Application for EL was within the 30 days moratorium period as prescribed under Section 30 of the Mining Act was not a ground for deregistration as described and captured under Section 125(1)(b) “an entry made in the Registrar without sufficient cause and therefore entry wrongly existing in the Register” (c) of the Mining Act.
  5. The first respondent made an error of law when finding that the appellant’s Applications for Exploration Licences accepted and registered as EL 2474 and EL 2475 was lodged within the 30 days moratorium period and in breach of Section 30 of the Mining Act 1992, which provided for the moratorium period to commence from the date of the Minister’s determination and not on the date of registration of the decision by the Register of Tenements.
  6. The first respondent erred in law when he shortly after deregistering the applicant’s application, granted an Application for EL to the sixth respondent (EL 2476 and EL 2477) on the 14th October 2016 and 17th October 2017 respectively, which was inclusive of the land area covered under the applicants deregistered EL.
  7. The first respondent erred in law when he accepted and registered the Application for EL of the sixth defendant (EL 2476 and EL 2477) on 14th October 2016 and 17th October 2016 when it was contrary to its own decision on 7th October 2016 in deregistering the appellant’s Application of 4th October 2016 (sic).

6. The legal issues before the Court for determination include issues such as whether the decision of the Registrar was lawful? In determining that issue, the Court will need to interpret Section 30 of the Mining Act. The question for determination is whether the decision of the Registrar to accept the exploration licence applications was made within the thirty (30) days moratorium or not. The other contentious issue is the commencement of the 30 days moratorium. Is it when the Minister makes a decision to cancel a tenement or when the Registrar registers the decision in the Tenement Register?


7. It is necessary for me to set out Section 30 of the Mining Act;


Where –

  1. an exploration licence expires, or is surrendered or cancelled; or
  2. any part of land within the land the subject of an exploration licence is surrendered or relinquished.

no valid application for an exploration licence over the same land shall be made by any person, within a period of 30 days after the date on which the land ceases to be the subject of the exploration licence as provided for under Sections 22(4), 141 and 145. (Emphasis mine)


8. The appellant argues that the Registrar erred in deregistering their applications for exploration licences because their application was filed after the moratorium had lapsed. They argued that the 30 days moratorium runs from the date the Minister made the decision and not when the Registrar receives and registers the decision. They argued that the Minister made the decision on 1st September 2016 and the 30 days lapsed on 1st October 2016. The appellant’s applications were lodged on 4th October 2016. The appellant also argued that the Registrar accepted applications for EL from the sixth respondent (EL 2476 and EL 2477) on the 14th and 17th October 2016 during the 30 days moratorium. The applications were land which overlapped with the land area covered under the appellant’s deregistered EL applications.


9. The respondents on the other hand, argued that the Registrar’s decision was correct and lawful. The moratorium commenced when the Registrar registered the decision. Therefore, the appellant’s applications were accepted by the Registrar. As soon as the Registrar became aware of its mistake, he rectified the decision. The respondents also argued that the Registrar did not commit an error of law when he accepted the sixth respondent’s applications because, the sixth respondent applied for EL’s which were available and not subject to a previous licence. It was open for the Registrar to accept their applications since the 30 days moratorium stipulated in Section 30 was not applicable.


10. The sixth respondent’s applications were lodged on the 14th and 17th October 2016. The respondent argued that the 30 day moratorium is enforced for EL’s which were either cancelled or expired where there was a previous exploration holder. The respondent argued that the 30 day moratorium commenced when the Registrar registered the decision by the Minister.


11. There is no dispute, that the Minister made a decision. Parties agree that the decision was made on the 1st of September 2016 by the Minister. The appellant filed a notice to produce the Minister’s decision in evidence. However, the Court ruled that it was not necessary to produce the decision. The respondents did not deny that the Minister made a determination on that date.


12. The crucial issue for determination is the construction of Section 30 of the provision of the Mining Act. The pertinent question is whether or not the statutory time limit runs from the day the Minister made a determination or when the Registrar registers the decision in the Tenement Register.


13. The first ground of appeal is that the appellant were denied natural justice, they argued that they were not afforded the opportunity to be heard before the Registrar made its decision. The appellant contends that the first respondent erred in law when he failed to afford them a right to be heard before deregistering their applications. (EL 247 and EL 2475).


14. The respondents submitted through counsel, that the appellant did not have a legal right or interest which required the respondent to protect and therefore accord to them the principles of natural justice.


15. I am of the view that the appellant was a mere applicant, there was no statutory requirement for the Registrar to afford them a right to be heard before deciding to deregister their application. This view is supported by the process set out in Section 125 of the Mining Act. Section 125 of the Mining Act provides for the procedure for rectifying the Register. If the Registrar or any other person discovers that there has been an omission of an entry; and entry was made without sufficient cause; a wrongly existing entry or there is an erroneous or defective entry in the Register, they may make an application to the Managing Director. After investigating the matter, the Managing Director may direct the Registrar to rectify the Register.


16. Section 125 of Mining Act is clear there is no requirement to inform the applicant. The applicant is a mere applicant. The person who is aggrieved by the direction or a decision made under Section 125 may appeal to the National Court.


17. The evidence before me indicates that the Registrar after discovering the discrepancy utilized the provisions under Section 125 to rectify the Register.


18. The appellant’s ground of appeal is without merit and is dismissed.


19. The appellant contends that by deregistering their applications, the Registrar breached Section 116 of the Mining Act.


20. The respondents on the other hand argued that the appellant has misinterpreted and misapplied Section116 of the Mining Act. Section 116 is irrelevant as the appellant did not have a legal or equitable interest capable of protection by Section 116. The relevant provision is designed to protect a legal or equitable interest in an existing or future tenement by ensuring that the interest is not capable of being created, assigned or dealt with unless it is done so by a written instrument.


21. I am of the view that the appellant is a mere applicant. Therefore, they have no legal or equitable interest which is capable of being protected by Section 116. Section 20 of the Mining Act is clear; the Minister grants an exploration licence upon application and after considering the Mining Council’s recommendation. I am of the view that only after the grant of an exploration licence by the Minister then that creates the legal rights and interests under an explorations licence tenement. The grant of the exploration licence invokes the protection under Section 116 of the Mining Act.


22. The acceptance of and registration of an application does not confer a legal or equitable interest to an applicant. An applicant is a mere applicant and does not have a legal or equitable interest at the application stage. The applicant only has a right to apply and a legitimate expectation that their applications would be considered according to the procedure under the Mining Act.


23. This ground of appeal is misconceived, the appellant does not have a legal or equitable interest capable of being protected by Section 116 of the Mining Act. This ground of appeal is frivolous and vexatious and is dismissed forthwith.


24. The third ground of appeal on which the plaintiff seeks to challenge the first respondent’s decision is that the Registrar exceeded his powers by deregistering their applications. The plaintiff contends that the Registrar exercised a power he did not have. The power to rectify the register is conferred on the Managing Director according to Section 125 of the Mining Act.


25. The respondents argued that this ground is clearly misconceived and without merit.


26. I accept the respondents’ submissions. Section 125(2)(a) and (b) of the Mining Act is clear. Upon receipt of an application to rectify the Register, the
Managing Director has the discretion to investigate the matter and then “direct the Registrar to rectify the Register in any matter which the Managing Director considers requires rectification (Section 125(2)(b) of the Mining Act).


27. Clearly, the power to rectify the Register is conferred on the Registrar as provided by Section 125(2)(b) of the Mining Act. The Managing Director is only responsible for investigating the matter and directing the Registrar to rectify the Register, if he considers that rectification is required.


28. There is evidence before me that confirms that the procedure under Section 125(2) of the Mining Act was complied with. At paragraph 11 of the Affidavit of Stanley Nekital, he stated that the matter was referred to the Managing Director. After deliberation the Managing Director directed the Registrar to rectify the Register by de-registering the appellant’s application lodged on 7th of October 2016.


29. This process was duly complied with, as evidenced by the first respondent’s letter dated 7 October 2016. The letter clearly stated that the Managing Director directed the Registrar to rectify the Register (see annexure A of the Affidavit of John Williamson filed on 28 February 2017).


30. The appellant’s third ground of appeal is without merit and is dismissed.


31. The appellant also contends that the registration of an application for exploration under Section 30 is not a matter which can be rectified under the process under Section 125 of the Mining Act.


32. The respondents argued that Section 125(1) of the Mining Act is wide enough to include this situation and therefore this ground of review is without merit.


33. Section 30 of the Mining Act prohibits the acceptance of applications within 30 days of the date the land ceases to be the subject of an exploration licence that has expired or has been surrendered or relinquished.


34. It is necessary for me to set out Section 125 of the Mining Act;


125. Rectification of the Register

  1. Where the Registrar or another person discovers that there has been –
    1. an omission of an entry from the Register or rejection of an instrument presented for registration; or
    2. an entry made in Register without sufficient cause; or
    1. an entry wrongly existing in the Register; or
    1. an error or defect in an entry in the Register, the Registrar or that other person may make an application to the Managing Director for rectification of the Register.
  2. On receipt of an application under Subsection (1), the Managing Director may –
    1. make an investigation into the matter; and
    2. direct the Registrar to rectify the Register in any matter which the Managing Director considers requires rectification.
  3. A person may appeal to the National Court against a direction or decision or to seek a decision by the Managing Director under Subsection (2), and the National Court may make such order as it considers necessary to settle the matter.
  4. The Registrar shall give effect to an order of the National Court under Subsection (3). (Emphasis mine)

35. I accept the respondents’ submissions. Section 125(1) of the Mining Act is wide enough to include registration of an application under Section 30 of the Mining Act. There is no specific provision that restricts applications made under Section 30 of the Mining Act. Section 125 is generally worded and is wide enough to apply to all entries made in the Register by the Registrar.


36. The appellant’s arguments are without merit. Even if I am wrong, Section 113(2) of the Mining Act is clear, a Register shall contain details of all registered applications for tenements. All instruments are also registered by the Registrar (Section 114). Section 125 permits the Registrar to correct the entries to the Register. When the appellant lodged their applications, they were accepted by the Registrar and registered pursuant to Section 113. The Registrar does have the power to rectify an entry where it has been made without sufficient cause, in this case it was accepted and registered contrary to Section 30 of the Mining Act. I am satisfied that the Registrar does have the power to amend or correct the Register. The appellant’s ground of appeal is without merit and is dismissed forthwith.


37. The fifth ground of review raises the contentious issue which is the crux of the appellant’s appeal.


38. The appellant contends that the 30 days moratorium provided for under Section 30 of the Mining Act commences when the Minister makes a decision. Therefore, the appellant’s applications for EL 2474 and EL 2475 were lodged after the 30 days moratorium on 3 October 2016.


39. The respondents on the other hand argued that the 30 days moratorium commences on the day the Ministers decision or instrument is registered. Therefore, by accepting the applications on 4 October 2016 the Registrar breached Section 30 of the Mining Act.


40. It is not disputed that the Minister did on the 1st of September 2016 refuse to renew the previous holder’s exploration licence. It is also not disputed that the Registrar received the Ministerial Decision on 3 October 2016 and proceeded to register it on the same day. It is also agreed that appellant lodged their applications on 4 October 2016 and the Registrar registered them as EL 2474 and EL 2475 in the Register.


41. In my view, Section 30 of the Mining Act is clear, the 30 day moratorium applies when an exploration licence expires, is surrendered or cancelled or in cases where part of the land within the exploration licence land is surrendered or relinquished. Upon the expiry of an exploration licence, the previous holder can apply to the Minister to extend the term of the licence (28(1) of the Mining Act). The Minister has a discretion to refuse an application for extension if he considers that it is in the best interest of the State.


42. The appellant argued that Section 112(1) of the Mining Act supports their view that the 30 days moratorium commences at the time the Minister made the decision. Sections 22(4), 141 and 145 of the Mining Act they argued, provides for the exception to the general rule.


43. In my view, the 30 day moratorium commences at the time specified under those provisions 22(4), 141 and 145 of the Mining Act. In cases of relinquishment the 30 days commences on the date the exploration licence would have expired (Section 22(4) of the Mining Act). In cases where a licence is surrendered by the holder, the time runs from the date the surrendered licence is registered (Section 141 of the Mining Act).


44. The appellant argued that Section 145 of the Mining Act is applicable in the present case. Section 145 of the Mining Act provides that upon cancellations or expiry of a tenement, all of the previous holder’s rights and interests conferred by or enjoyed under the tenement shall cease as from the date of the cancellation. The appellant’s argument seems to be that the previous tenement holders ceased at the date of cancellation. The cancellation is according to their submissions, the date the Minister refused to renew the previous holder’s application. The date of the cancellation is the date which the 30 days moratorium commences.


45. I do not accept this argument for the following reasons. First, Section 145(1) of the Mining Act provides that the rights and liabilities of a holder of a tenement cease when the tenement is cancelled. The appellant is not the previous tenement holder. There is no evidence before me to prove that the appellant was the previous tenement holder. The appellant was a mere applicant.


46. Secondly, Section 142(2) of the Mining Act states that the Minister may cancel the tenement. The argument that the 30 days moratorium runs from the cancellation and not the date of registration is without merit. Firstly, the tenement had expired and the previous holder had applied to renew the application but it was refused.


47. Therefore, in the present case, we are dealing with an expired tenement and not a cancelled tenement.


48. Section 142(2) of the Mining Act is clearly not applicable. Section 142(1) of the Mining Act provides for the process of cancellation of a licence where the holder of a tenement breaches a provision of the Act or a condition of the tenement. When reading the whole provision (Section 142) it very is clear that the provision outlines the process of cancellation of a tenement.


49. The argument is also flawed because Section 143 of the Mining Act compels the Registrar to immediately register the cancellation in the Register. Section 144 of the Mining Act states that upon expiration of a tenement, the Registrar shall immediately register the expiry in the Register. Section 113(2) of the Mining Act is also clear that the Register shall contain details of all registered applications for tenements and all details of their subsequent grant, or refusal and of such other particulars as may be prescribed in relation to those tenements.


50. In my view, Section 28(2) of the Mining Act is applicable. The Minister has a discretion to refuse to extend an exploration licence. Whilst, I note that there is no time limit for the decision by the Minister to take effect, it is still a mandatory requirement for that decision to be registered by the Registrar inorder for it to take effect.


51. Section 114 of the Mining Act requires all instruments to be registered. Section 114(2) of the Mining Act is clear, the time and date of the lodgement with the Registrar is deemed to be, the time and date to which registration was effected.


52. Therefore, according to the evidence before me, I find that pursuant to Section 114(2) of the Mining Act, the Minister’s decision made on 1 September 2016 was not effected until it was registered pursuant to that provision. I am satisfied that the respondent are correct that the registration of the Ministers decision is the date on which the 30 days run from. Mr Brooks of counsel for the seventh respondent also pointed out that the appellant did accept the first respondent’s decision. I find that the appellant did accept the decision. The letter dated 10 October 2016, is evidence that the appellant did accept the decision (Annexure A of the Affidavit of John Williamson filed on 28 February 2017). Regardless of the fact that the appellant accepted the decision, they decided to challenge the decision. I am not convinced that this appeal was genuine as it appears to be an attempt by the appellant to frustrate the application process for exploration licence under the Mining Act. Therefore, the Registrar’s decision to de-register their application was correct and made in compliance with Section 30 of the Mining Act.


53. The appellant’s ground of review is without merit and is dismissed forthwith.


54. The appellant also argued that the Registrar committed an error in law when it accepted and registered the sixth defendant’s application during the 30 day moratorium.


55. The respondents argued that the sixth respondent applied for land which was available and not subject of a exploration licence or other tenement.


56. There is no evidence from the sixth respondent. Since the appeal was lodged. It appears the sixth defendant was not interested in these proceedings which is evident from the lack of representation in those proceedings. The respondents submitted that those applications could be lodged at any time. In the evidence of John Williamson, he says the defendant’s application were EL 2476 and EL 2477. In the affidavit of Stanley Nekital, there is no mention of EL 2476 and EL 2477 which leads me to infer that they had not applied for the licences which the appellant had applied for. At paragraph 27 of the affidavit of Stanley Nekital, he sets out a table of the ballot results. From the table the sixth respondent’s EL allocated tenement numbers are EL 2487, EL 2507 and EL 2499. There is no mention of EL 2476 and EL 2477. It is reasonable to infer that those applications (EL 2476 and EL 2477) where for other areas. I accept the respondents submissions that those applications were for other tenements, not the same tenements the subject of this appeal.


57. This ground of review is without merit and is dismissed.


58. The appellant has not established any of its grounds of appeal. Therefore, the appeal should be dismissed with costs.


59. For the foregoing reason, the appellant’s appeal is dismissed forthwith. The appellant to pay the first, second, third, fourth and seventh defendants’ costs of and incidental to the appeal to be taxed if not agreed. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.


Orders accordingly,


Twivey Lawyers: Lawyer for the Plaintiff
Allens Lawyers: Lawyer for the First, Second, Third and Fourth Defendant
Office of the Solicitor General: Lawyer for the Fifth Defendant
Ashurst Lawyers: Lawyer for the Seventh Defendant


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