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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 103 OF 2016
BETWEEN:
SUMMIT DEVELOPMENT LIMITED
Plaintiff
AND:
BYRON CHAN as MINISTER FOR MINING
First Defendant
AND:
PHILIP SAMAR, REUBEN GUISI, SEAN NGANSIA, LAVE MICHAEL, MICHAEL WAU, NATHAN MOSUSU, CALVIN DUSAVA, ROGER GUNSON, GRETEL OREKE AND
SHARON BAGI as members of the MINING ADVISORY BOARD
Second Defendant
AND:
STANLEY NEKITAL as the Registrar of Tenement
Third Defendant
AND:
MINERAL RESOURCES AUTHORITY
Fourth Defendant
AND:
GMG GLOBAL MINING GROUP LIMITED
Fifth Defendant
AND:
NEW BRITAIN LIME & CEMENT LIMITED
Sixth Defendant
AND:
PNG RESOURCES CORPORATION LIMITED
Seventh Defendant
Waigani: Nablu, J
2017: 5 September
2018: 27 April
JUDICIAL REVIEW – Mining Act ss. 24, 101, 110(4) – Review of the decision of the Minister to refuse to renew an application for extension - exploration licence – denial of natural justice – bias or apprehension of bias – Wednesbury principles of unreasonableness – harsh and oppressive decision – contrary to ss. 41, 59, Constitution – applicant failed to prove grounds of review – judicial review application refused and dismissed.
Cases cited:
Papua New Guinea Cases
Boateng v. The State [1990] PNGLR 34
Brian Curran v. The State, Minister for Foreign Affairs, Arnold Marusipal, Bernard Narakobi & Others (1994) N1259
Kekedo v. Burns Philip [1988-89] PNGLR 122
Mision Aiski v. Manasupe Zurenouc (2005) SC797
Ombudsman Commission v. Peter Yama (2005) SC747
Raz v. Matane [1985] PNGLR 329
Overseas Cases
Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 233
Counsel:
D H Katter & G Kogora, for the Plaintiff
I Molloy & T Yapao, for the Second, Third and Fourth Defendants
I Shepherd, for the Fifth Defendant
S Gor, for the Sixth Defendant
A Kimbu, for the Seventh Defendant
27th April, 2018
1. NABLU J: Summit Development Limited was granted leave to review the decision of the Minister to refuse to renew their application for extension of the exploration licence EL1093. The plaintiff also seeks to review the decision of the Mining Advisory Council (“Council”) to recommend that the Minister refuse their application for renewal of the said exploration licence. The Council’s recommendation was made on 21st July 2015. The Minister’s final decision was made on or about 14th December 2015. The land area subject of the exploration tenement is located at Mt Kare in Enga Province.
2. If the plaintiff’s application for judicial review is granted, they seek to quash the Minister’s decision and the Council’s recommendation. The plaintiff also sought various declaratory orders and costs.
3. The background facts of the matter is adequately provided in the affidavits of Martin Jones and Asok Jairath which can be found in the Review Books. It is not disputed that the plaintiff was the former holder of tenement EL 1093. It is also not disputed that the exploration licence expired on 28th August 2014. The plaintiff lodged its’ application for renewal on 28th July 2014. The plaintiff contends that they had substantially complied with the terms of EL 1093.
4. The Council then deliberated on the plaintiff’s renewal application and resolved to recommend to the Minister to refuse the plaintiff’s renewal application on 21st July 2015. The plaintiff contends that the application for renewal and extension was delayed for an unreasonable period of time which was totally unfair and prejudicial to them. The plaintiff argued that during the year which the Council took to consider the renewal application, they had expended approximately a year of their annual budget. The plaintiff has completed a Land Investigation Study and Land Investigation Report as required by the Land Act. The plaintiff had successfully completed the Warden’s Hearing at Mt Kare. They also argued that they also expended funds in contesting the court proceedings and the court annexed mediation for OS No. 748 of 2014_ Palipe Agu & Others v. Summit Development Ltd & Others.
5. Despite that the recommendation for refusal was made on 21st July 2014 by the Council. The final decision of the Minister to refuse the renewal application was made on 14th December 2014, about five (5) months after the Council’s recommendation.
6. The Council’s recommendation to refuse the renewal application was based primarily on the grounds that the plaintiff did not have the technical or financial capacity to carry out the programme.
7. The plaintiff’s challenge of the decisions is founded on seven (7) grounds of review. The first ground of review is that the defendant’s decision was infected by bias or an apprehension of bias. The decision was harsh and unconstitutional because it was made contrary to Section 59 of the Constitution. The plaintiff also alleged that they were denied natural justice in that they were not afforded procedural fairness and was not given an opportunity to be heard. The plaintiff also contended that the decision was harsh and oppressive and a proscribed act which came within the meaning of Section 41 of the Constitution and unreasonable with the Wednesbury sense.
8. Parties identified and agreed that there are eleven (11) legal issues to be determined by this Court. I propose to deal with these issues when dealing with the plaintiff’s grounds of review.
9. It is trite law that judicial review proceeds in two stages. The first stage is for the applicant to establish one or more grounds of review. The second step then is for the successful applicant to make a case for the relief; Mision Aiski v. Manasupe Zurenouc (2005) SC797.
10. I am of the view that the seven grounds of review can be reduced to four main grounds of review. I agree with the submissions by most of the defendants’ counsel which submitted that the pleadings, with respect, were repetitious and lacked clarity. I would summarize the grounds as follows;
11. I propose to deal with them according to the order in which I have listed them.
12. The plaintiff contends that the first and second defendant’s denied them natural justice which is required by Section 59 of the Constitution. The breach of natural justice was manifested when the first and second defendant’s failed to take into account relevant considerations. They argued that the relevant considerations were;
“ a. The actual expenditure of the plaintiff significantly exceeding the required expenditure during the currency of EL 1093 up to August 2014.
b. The actual expenditure of the plaintiff during the period from August 2014 to the dates of the defendants’ decisions.
c. The encouragement by the defendants of the said expenditure after August 2014.
d. No consideration or proper consideration was given to the plaintiff’s successful achievement of important milestones as required by the defendant.
e. The restricting of the plaintiff’s parent company and its ability to raise funds as they were to be required in the future.
f. The manner in which the defendant’s considered the financial capability of other applicants for Exploration Licences.”
13. The plaintiff also argued that they were not afforded procedural fairness. The defendants had a duty to give a proper opportunity to the plaintiff to be heard on the issue of their financial capacity.
14. The defendants failed to give a proper opportunity to be heard on that issue and failed to exercise its statutory duty to seek further information or clarification which is provided for in Section 110 of the Mining Act. The second defendant neglected to or refused to meet with the representatives of the plaintiff’s parent company.
15. All the defendants submitted that the plaintiff were not denied natural justice. In particular the plaintiff was given an opportunity to respond to the issue of whether they were financially capable of carrying out the programme. Section 24 of the Mining Act provides for renewal of an Exploration Licence. The procedure for the grant or renewal of an exploration licence is clear. It is necessary to set out the relevant part of the legislation. Section 24 states that:
“24. Application for grant or extension of exploration licence.
An application for the grant or extension of the term of an exploration licence shall be –
16. Despite the fact that the requirement is not expressly provided for the Mining Department officials’ duty to observe the principles of Natural Justice, it is trite law that the principles of Natural Justice must be observed and dispensed with when public officials exercise a statutory power when making administrative decisions.
17. Natural Justice principles include the right to be heard, the right to be informed of the charges, right to respond to the charge, the right to be furnished with reasons for the decision (see the case of Ombudsman Commission v. Peter Yama (2005) SC747).
18. There is no issue, the plaintiff’s application was lodged in compliance with Section 24 of the Mining Act. The main issue is whether the plaintiff’s application for renewal was dealt with according to the law.
19. The plaintiff contends that their application was lodged pursuant to Section 24 of the Mining Act. There is no dispute, I find that the plaintiff has lodged its application for renewal of the tenement. Section 24 of the Mining Act requires an applicant to lodge its application for the grant or extension of an exploration licence in the prescribed form. The Form must include a schedule containing the description of the boundary, a sketch map of the area which specifies the longitude and latitude. A programme and statement giving particulars of the technical and financial resources available to the applicant. The application is lodged in triplicate and evidence that payment of the application fee has been made. The lodgement procedure is specified in Division VI.1 and the provision is worded in mandatory terms. According to the evidence of Askoh Jairath, the application was lodged (Annexure AJ15 of his affidavit, Pages 99 – 113 of the Review Book). This is consistent with the evidence of Philip Samar and Roger Gunson.
20. Under this ground of review, with respect, the plaintiff’s submissions are confusing. They have made submissions in regard to the legal issues identified. With respect, the plaintiff’s case should be to prove the grounds of review inorder to prove their case and make a case for the relief to be granted. Therefore, the submissions should be made in regard to the grounds of review.
21. Perhaps, the starting point of any application for judicial review is to start with the words of Kapi, DCJ (as he then was) in Kekedo v. Burns Philip (supra), and that is “...the purpose of judicial review is not to examine the reasoning of the subordinate authority with the view to substituting its own opinion. Judicial Review is concerned not with the decision but with the decision-making process.” Therefore, I find that the plaintiff’s application for renewal was duly lodged.
Ground One: Denial of Natural Justice
22. Now, I turn to the grounds of review. In the first ground of review the plaintiff contends that the plaintiff did not follow the correct process stipulated in Section 101 of the Mining Act. Section 101 of the Act requires the Registrar to “verify to his reasonable satisfaction the following matters”. The preliminary examination of the application is made by the Registrar. If the Registrar is not able to verify the application he then exercises his powers to reject the application.
23. The plaintiff argued that if at that stage, the Registrar was not satisfied then he had a statutory obligation to return the application to them to rectify the documents. However, the Registrar was satisfied and proceeded on to refer the plaintiff’s application to the Council.
24. I am not persuaded by these submissions. Section 101 of the Mining Act relates to the form of the application. The Registrar is only required to verify that the application is on the prescribed form, contains all the relevant particulars and the fee has been paid.
25. According to Section 101 of the Mining Act, the Registrar is required to undertake this at the time the application is lodged in the presence of the applicant or their agent. The plaintiff cannot now come and state that the Registrar should have rejected their application. At that point in time, the Registrar’s duty is confined to verifying that the application was in the correct prescribed form and contained all the relevant information as required by Section 101. Section 101 does not require the Registrar to consider the merits of the application. Clearly this submission is misconceived.
26. The plaintiff also argued that the Council did not utilise the provision under Section 110 (4)(c) of the Mining Act with regard to the plaintiff’s financial capacity. Section 110(4) states that:
(4) Unless otherwise provided for this Act, the Council 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 Council.
27. Upon reading this provision it is clear that the plaintiff’s arguments are misconceived. The deferral of an application and request for further information is done at the discretion of the Council. It is not the duty of the Registrar at the time of lodgement of a tenement application to request for further information.
28. It is not disputed that the main reason why the plaintiff’s application was refused was because the Council was not satisfied that the plaintiff had the “...financial resources available to carry out the proposed work program for the extended work period”.
29. The evidence of Martin Jones is that the sole shareholder of the plaintiff, an entity named Indochine Mining Limited, an Australian company was placed into voluntary administration on 27th March 2015. However, he maintained that he was appointed the administrator, and creditors of Indochine had resolved to provide further capital to Indochine and would raise sufficient funds which would be used to develop Mt Kare and also settle its debts. The company has executed a Deed of Company Arrangement to prove this.
30. The plaintiff submitted that the Council were obliged to defer the consideration of the application for extension and ask the applicant for further and better particulars pursuant to Section 110(4)(c) of the Mining Act. The evidence by Ashok Jairath was that the applicant was never asked for further information nor was a formal notification under Section 110(4)(c) of the Act was given, therefore this was a denial of their right to natural justice. The reason the defendants’ did not have any evidence of the technical and financial capacity was not a valid reason to refuse the application to extend. Furthermore, the evidence of Mr Gunson and Mr Samar did not disclose any evidence that the defendant’s raised issue with the plaintiff’s technical and financial capacity.
31. I am not persuaded by those submissions. There is evidence before the Court which indicates that the defendant’s did communicate its concerns. When the plaintiff’s application was accepted a letter of acknowledgement dated 27th August 2014 was provided to the plaintiff (see page 950 of the Review Book). Then on or about 2nd April 2015, following the preliminary assessment, the Mineral Resources Authority then informed the plaintiff about the concerns it had about their financial capacity after the voluntary administration of its parent company, Indochine (see page 217 of the Review Book). There is also evidence that Roger Gunson travelled to Brisbane, Australia to meet the administrator of Indochine and the country manager of the plaintiff company on or about 20th April 2015 (see page 182 of the Review Book). Furthermore, the Administrators’ report of 4th May 2015 was considered by the Council (see page 183 of the Review Book). There is also evidence that Roger Gunson, attended the second creditor’s meeting, via video link from Sydney where they raised queries on the plaintiffs’ financial capacity and its ability to fund the work programs in the event the extension to the exploration tenement was granted. I find that there was communication between the plaintiff and the third defendant on the issue of financial capacity.
32. The principles of natural justice stem from Section 59 of the Constitution and the underlying law. The applicable test is whether justice is done and seen to have been done.
33. In the present case, the plaintiff’s contention that the second and third defendants failed to give them an opportunity to be heard on the issue of whether the plaintiff had the ability to meet its future expenditure is contrary to the evidence before me. I find it difficult to conclude that the second and third defendant’s actions were so outrageous that it constituted a denial of natural justice to the plaintiff. I am not satisfied that any injustice was perpetrated by the second and third defendants. I am satisfied that there is evidence that the defendants did fully consider the issue and provided reasonable opportunity to the plaintiff to discuss the issue. Accordingly, I dismiss the plaintiff’s first ground of review.
Ground Two: Wednesday Principles of Unreasonableness
34. In my view, the summary of the argument by the plaintiff relate to the soundness, rationality and reasonableness of the first and second defendant’s decisions. The pertinent issue here is whether the first and second defendant’s recommendation and decision to refuse to extend the exploration licence was unreasonable?
35. The common law principles of unreasonableness emanate from the classic case of Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 233. The Wednesbury principles of unreasonableness as they are commonly referred to, has been adopted and applied in numerous cases in this jurisdiction. A succinct summary of the principles was pronounced by the Supreme Court in the case of Ombudsman Commission v. Peter Yama (supra). They are as follows;
(1) It must be a real exercise of discretion;
(2) The body must have regard to matters which it is expressly or by implication referred by the statute conferring the discretion;
(3) It must ignore irrelevant considerations;
(4) It must not operate on the basis of bad faith or dishonesty;
(5) It must direct itself properly in law; and
(6) It must act as any reasonable person would act and must not be so absurd in its action that no reasonable person would act in that way.
36. It is the sixth principle which is often referred to as the one that succinctly summarizes the Wednesbury principles.
37. In the present case, there are two pertinent questions for determination by this Court. The first question is, whether the first and second defendant’s decisions were unreasonable, absurd and one which no reasonable decision-maker could have made? The second question is whether the first and second defendant’s failed to take into account or properly take into account relevant considerations. I note in relation to this question, that the plaintiff made submissions under a breach of natural justice, however, in my view this ground of review constitutes an argument under the principles of unreasonableness.
38. At the outset, I will deal with the second question. The plaintiff contends that the plaintiff failed to take into account or properly take into account relevant considerations such as those set out in the earlier part of this judgement. I am not persuaded that the first and second defendants took into account irrelevant considerations or did not properly consider relevant considerations.
39. Section 26 of the Mining Act is clear and worded in mandatory terms. When assessing an application under Section 24, the Council is required to consider whether the programme submitted by the applicant provides for a “...substantial increase in acquisition and interpretation of exploration data from the area of the exploration licence, or the conduct of related laboratory or feasibility work; and (that the applicant) meets the prescribed minimum expenditure requirements; and whether the applicant has the technical and financial resources available to effectively carry out the programme...” This provision is clear that the considerations provided under Section 26(1) must be deliberated on by the Council. It is not expressly stated that the second defendant is required to consider the actual expenditure which exceeded the term of the tenement or the successful attainment of the milestones like the Land Investigation Reports or the fact that the plaintiff’s parent company restructure was imminent and they would be able to raise funds to carry out the programme as argued by the plaintiff. The statutory provision is worded in mandatory terms and the Council is requirement by law to only consider those considerations under Section 26 (1) of the Act. With respect, I am not persuaded that the first and second defendants were under a statutory obligation to take into account other consideration other than those specified in the Act. If the Council took into account other considerations then its decision would be unreasonable.
40. Now turning to the question of whether the plaintiff’s decision was unreasonable. I am not persuaded that the decision was so unreasonable that no reasonable decision maker would have made such a decision. Firstly, greater deference should be paid to the administrative body making such a decision or exercising its discretion. The plaintiff’s application was to extend its exploration licence for a further two years. It is not unreasonable for the second and third defendant’s to be satisfied that the plaintiff was in fact able to meet its financial commitments to carry out the proposed exploration programme. The fact that the second and third defendant was not satisfied with the plaintiff’s technological and financial capacity following the voluntary administration of its parent company who is also the sole shareholder of the plaintiff company; is not a decision which is absurd or irrational.
41. In the evidence before me, Ashok Jairath in his affidavit provides some examples of companies which were granted exploration licences despite having insufficient funds (see page 823 of the Review Book). The plaintiff submits that the second and fourth defendant should not have required the plaintiff to have cash in hand at the time of lodgement of its renewal application, because there was evidence that the plaintiff was able to secure funds to fund the Mt Kare Project. At the outset, I reject these submissions, the evidence provided by Ashok Jairath is hearsay evidence and is not admissible. The issue before the Court is whether the second and fourth defendant’s complied with the relevant statutory provisions when considering the plaintiff’s application.
42. Again, I have great difficulty in finding that the decision to refuse is unreasonable within the Wednesbury sense. Therefore, this ground of review is unmeritorious and I dismiss it accordingly.
Ground Three: Breach of Section 41 of the Constitution
43. In the third ground of review; the plaintiff contends that the defendants’ actions were unlawful and proscribed acts by Section 41 of the Constitution in that they were harsh and oppressive. The decision was not warranted by or was disproportionate to the requirements of the particular circumstances reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind. At the outset, I am of the view, that this ground is misconceived. Section 41 of the Constitution provides individuals against harsh and oppressive and proscribed acts (see Raz v. Matane [1985] PNGLR 329). This is a right which is also available as a remedy for the harsh and oppressive actions of employers. In Brian Curran v. The State, Minister for Foreign Affairs, Arnold Marusipal, Bernard Narakobi & Others (1994) N1259, Brown, J stated that “S41 does not concern itself with procedural fairness but with a resultant effect.” Therefore, the effect of Section 41 is that the decisions which were made under a valid law however, the effect of the decision is that it resulted in an unlawful act or was harsh and oppressive. I am not convinced that the plaintiff can argue that the decision was unjustified in the circumstances. The decision did not result in a harsh or oppressive act. The second and third defendants did not act unreasonably or deny the plaintiff’s natural justice. Instead the second and third defendants did everything to ensure the plaintiffs had every opportunity to be heard on the issues.
44. I am not persuaded that Section 41 of the Constitution is applicable, accordingly, I dismiss this ground of review.
Ground Four: Bias or Apprehension of Bias
45. The plaintiff contends that the decision to refuse the application was infected with bias or there was an appearance of bias. The plaintiff submitted that the decision was not made in a timely manner. EL 1093 expired on 28th August 2014. The plaintiff says that they lodged their application on 27th July 2014. The evidence before me indicates that the application was lodged the day before the expiry date which was the 27th August 2014. The plaintiff submitted that the Council’s recommendation was made on 21st July 2015, which was 11 months later. Then the Minister made the decision in December 2015. The whole process was unreasonably delayed by one (1) year and four (4) months.
46. According to the affidavit of Roger Gunson, some of the causes for the delay was the effect of court injunctions issued in December 2014 which related to customary land ownership issues (see page 341 of the Review Book).
47. Another cause for the delay was the requirement for the MRA Technical Assessment branch to conduct an appraisal of the technical part of the application and the requirement for a Warden’s Report to be made available. Section 104 and 109 of the Mining Act provides for the statutory process which is worded in mandatory terms.
48. The delay was due to the requirement to furnish various reports according to the provisions of the law. The plaintiff is required to lodge their application for renewal six (6) months prior to the expiry date of the licence. I am of the view that the purpose of this is to allow for various reports and assessments to be made and carried out. Some of the causes of the delay were reasonable in my view. The reports need to be furnished before the matter could be considered properly by the Council (see Section 32 of the Mining Act).
49. The plaintiff also stated that the second and third defendant’s then registered the fifth defendant’s application for the exploration licence on the 18th December 2015 contrary to Section 30 of the Mining Act which required a 30 day moratorium following the period after an application for an exploration licence expired or was refused.
50. Before I consider the issue of bias or apprehension of bias, at the outset, I am of the view that the plaintiff cannot raise the issues of the fifth defendant’s application for the Exploration Licence. The issue before this Court is the decision to recommend the refusal and the decision to refuse the extension of the exploration licence EL1093. Those issues are a matter for another Court and I do not think it is necessary to consider those issues.
51. The test for bias or the apprehension of bias is clearly stated in the case of Boateng v. The State [1990] PNGLR 34 which is, whether a reasonable fair minded person sitting in Court and knowing all the relevant facts would have a reasonable suspicion of bias or that a fair trial was not possible. I am of the view that the test is equally applicable in civil cases and to be considered on the civil standard of proof.
52. In the present case, I am not satisfied that a fair minded observer having knowledge of the relevant facts would have a reasonable suspicion that there was bias in the decisions. There is no evidence that the Minister or members of the Council had any personal interest in the matter or had a personal vendetta against the plaintiff. In fact, I find that there is evidence that Roger Gunson and the third defendant made every effort to ensure that there was communication with the plaintiff when the issues regarding their technology or financial deficiencies were raised. Therefore, when applying this test, I am of the view that a reasonable person would not reasonably suspect that there was bias or that there was apprehension of bias which would influence the decision-maker to make the decision complained of.
53. Therefore, I am of the view the plaintiff has not established the final ground of review. Having found that the plaintiff has not established their case of judicial review and based on the foregoing reasons, the plaintiff’s application for judicial review is refused and is dismissed.
54. In regard to costs, generally the Court has the discretion to award costs and generally costs follow the event. However, in this case, I am of the view, that it was totally unnecessary for the fifth, sixth, and seventh defendants to be joined as a party to these proceedings. I agree they were of the view that their rights and interest would have been adversely affected, however, I am of the view that the onus of establishing the application for judicial review is the plaintiff’s. The onus of defending the decisions was the first, second, third and fourth defendants. With respect, whilst the submissions by the defendants were interesting, they all repeated same or similar submissions which in my view were already adequately covered by the second, third and fourth defendant’s counsel. Therefore, in my view, the plaintiff is to pay the second, third and fourth defendant’s costs of and incidental to the proceedings to be agreed if not taxed. The fifth, sixth, and seventh defendants to pay their own costs of the proceedings.
Orders accordingly,
Dentons PNG: Lawyers for the Plaintiff
Allens Lawyers: Lawyers for the Second, Third and Fourth Defendants
Ashurts Lawyers: Lawyers for the Fifth Defendant
Fiocco & Nutley Lawyers: Lawyers for the Sixth Defendant
Kimbu & Associates Lawyers: Lawyers for the Seventh Defendant
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