Cadia Holdings Pty Ltd & Anor v State of New South Wales & Anor [2009] HCATrans 321 (11 December 2009)

Last Updated: 14 December 2009

[2009] HCATrans 321

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S174 of 2009

B e t w e e n -

CADIA HOLDINGS PTY LTD

First Applicant

NEWCREST OPERATIONS LIMITED

Second Applicant

and

STATE OF NEW SOUTH WALES

First Respondent

MINISTER FOR MINERAL RESOURCES

Second Respondent

Application for special leave to appeal

FRENCH CJ
GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 DECEMBER 2009, AT 9.38 AM

Copyright in the High Court of Australia

MR A.J.L. BANNON, SC: May it please the Court, I appear with my learned friend, MR R.C. SCRUBY, for the applicants. (instructed by Marque Lawyers)

MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales: If the Court pleases, I appear with my learned friend, MR H.R. SORENSEN, for the respondents. (instructed by Crown Solictor for New South Wales)

FRENCH CJ: Yes, Mr Bannon.

MR BANNON: Your Honours, in our submission, the majority judgments in the Court of Appeal overlook or pay insufficient attention to two important matters. The first is the use of the expression “mine of copper” in which it was used in the Case of Mines and there are three references in that judgment which, we submit, make it clear that what was being considered in that case was regarded as a mine of copper being a body of copper ore containing substantial amounts of copper and, indeed, substantial amounts of gold as well. If I could take your Honours to the materials.

GUMMOW J: Before we get into that, what particular New South Wales statutory provision is the court construing?

MR BANNON: In the present case?

GUMMOW J: Yes.

MR BANNON: The question of who owns the minerals, in particular the gold and the copper, in the land the subject of ownership of the applicants. So it is the Mining Act - - -

FRENCH CJ: It is a question of whether it is publicly owned within the meaning of the Mining Act, is it not?

MR BANNON: That is right.

FRENCH CJ: What is the section?

MR BANNON: The relevant section is section 11.

GUMMOW J: Section 282, is it not?

MR BANNON: Sections 282 and 283, which is set out in the judgment.

HAYNE J: You have then to go to the dictionary and to Schedule 2.

MR BANNON: I think the respondent has sent up a section of a body of materials and sections 282 and 283 are behind tab 4 of that at page 41.

HAYNE J: Yes. What we seem not to have in that is the Schedule 2, do we, of the - - -

MR BANNON: The dictionary I think is at page 36.

HAYNE J: Sorry, the Schedule 2 minerals as defined in the Mining Regulations, is that right?

MR BANNON: Page 36 has a dictionary and “publicly owned mineral” appears at page 39 as meaning “a mineral that is owned by, or reserved to, the Crown”. So that is the ultimate issue which is to be determined.

HAYNE J: But you have to read it, do you not, with the minerals as identified in the Mining Regulations?

MR BANNON: Yes.

HAYNE J: Minerals as identified in the regulations are what might be identified as the extracted or smelted mineral? You have a list of gold, copper, et cetera.

MR BANNON: Yes, but the question of ownership has to be determined before it comes out of the ground because section 11 provides that once it is out of the ground it is owned by whoever has extracted it.

HAYNE J: But the question is one of construing the New South Wales Act initially, is it not?

MR BANNON: Yes.

HAYNE J: The question of construing what is publicly owned mineral? When one looks at the Act there are at least some indications that the notion of mineral is a notion not of an ore body, an add mixture, a bit of dirt, something recovered from?

MR BANNON: Yes, we would pray that in aid.

HAYNE J: But one does not dive into the 17th century cases without first pausing to look at the New South Wales Act and try to work out what it is meaning.

MR BANNON: We certainly contend and have contended that, perhaps without that degree of precision, when one looks at this Act and the scheme which is promotes it is to pay a royalty on minerals which can be defined sensibly and defined in a way which does not require a digging-up process to work out whether or not you have got the mineral and how much you have to pay and, equally, does not depend on changes in technology which may relate to the degree of precision with which one can identify the precise minerals on which royalties have to be paid.

Hence, if the minerals the subject of royalties cannot be identified until you dig it up, in effect, and it depends on the mining method and perhaps even the location of the land, so that you may have to dig up a lot more – and this is really the Crown’s argument, namely, if you happen to dig up a lot which is nearby the gold, then they own that as well – we say that is an uncomfortable way of interpreting the legislation to produce that result. So we say at taws or at first principles the simple answer is to say, well, they own the gold, I can identify gold as a mineral which once extracted can be readily identified and one can know for certain before anything is pulled out that if there is gold there, it is owned by the Crown. That is a matter of certainty and produces an outcome which is sensible and a fair balance between the rights of the subjects and the Crown.

HAYNE J: But the tension your side of the argument has to address is that the definition of “publicly owned mineral”, mineral owned by or reserved to the Crown, is at least consistent with, perhaps requires the conclusion that it is talking about stuff still in the ground.

MR BANNON: Yes, I accept that, but that is really where we dive back into the 17th century to try and resolve that difficulty. Obviously there are a number of threads to our argument, the least of which, although it has not received much attention in courts below although it has been argued, is whether the proper analysis of the royal prerogative to enter and dig up ore bodies which have gold – to the extent the Case of Mines back in the 16th century suggested that – they used the word “belong”, the copper belongs to or is owned by the Crown, it does not actually use the word “ownership” – that may be a matter which should be properly understood as to refer to a right of entry and ownership once the right of entry has been exercised and the ore has been dug up, but prior to the exercise of right of entry, it is wrong to characterise that as an ownership right, that is, an ownership in the ore which may be necessary to dig up to find the gold.

FRENCH CJ: Yes, all this is on the assumption, incidentally, that the prerogative passed seamlessly through the various imperial statutes and colonial statutes relating to dealings in the waste lands of the Crown in New South Wales and also through the process of Federation unchanged.

MR BANNON: Well, it does insofar as it relates to gold, because there have been a number of references to gold and we have accepted throughout that – well, my clients have not sought to say that the Crown does not have a right of access to the gold, but there is a difficulty we recognise in - - -

GUMMOW J: In the State of New South Wales.

MR BANNON: State of New South Wales, I am sorry. There is a difficulty in assuming necessarily that the matters of interest to the Crown in England in relation to gold, and there is of coinage - - -

FRENCH CJ: Of coinage and raising military forces and so forth.

MR BANNON: Exactly – would apply in New South Wales. There is obviously a history of mining licences as well which were introduced, similar to the time at which the grants were made. But there was no real suggestion that anybody in the right of the Crown was ever in New South Wales seeking to dig up gold or ore bodies in New South Wales with a view to raising an army or coinage.

HAYNE J: But coinage in Australia pre-Federation was effected by branches of the Royal Mint in the sense of the Imperial Mint. Quick and Garran looks at the history of the Royal Mint and the coinage.

MR BANNON: We certainly say that the issue of the scope of the prerogative at all and its application in New South Wales is a matter which has to be resolved if this Court was to grant special leave and we say it is an important issue. The scope of it and consideration of it will inevitably arise in the context of the task of interpreting the provisions of the New South Wales statute. We also say – perhaps if I may be permitted to dive back into the 16th century – that if one considers – perhaps not my specialty such as the Chief Justice of New South Wales, but nevertheless, the question which does arise, we submit, if one proceeds down that route, is that the expression “Mine of Copper” appeared in the headnote of the Case of Mines.

The pleading, it was pleaded out on behalf of Her Majesty as described as a mine of copper. In the report of the majority judgment it was described as a mine of copper containing gold and hence a royal mine. That is the context in which the 1688 Act was enacted. So when it refers to mine of copper, we say it is plainly referring to something which was comprehended by the Case of Mines which had lots of copper and lots of gold. So when Acting Justice Handley in the Court of Appeal says this is really talking about a gold copper mine, that is not a category which was in existence at the time the 1688 Act was legislated. What was acknowledged was that as at 1688 there were things called mines of copper which had been recognised as such at the Case of Mines as a substantial body of copper ore containing gold. That is exactly the sort of thing which it was directed to.

Everyone has agreed in this case that the expression “mine” comprehends a body of ore in the ground. To the extent there is a legislative object back in 1688 to encourage the working of mines, a test which depends on the commercial amount of gold or copper under the ground cannot rationally sit with an object to encourage working of mines because you cannot actually find out how much of each is in the ground until you dive in, dig it out and do some sort of weighing process and then have a look at the market rates at the time. So to the extent that the majority lands on a commercial test, it is a test which, we submit with respect, does not make any sense because it cannot be applied and cannot happily sit with an object which is designed to encourage the working of mines.

So that is the second matter we say that the majority do not pay sufficient regard to. The first one is the acknowledgement that the Case of Mines was indeed dealing with a mine of copper in the sense of an ore body worth substantial amounts of gold and, secondly, accepting that a mine includes an ore under the ground, then their test cannot apply. It can never work sensibly until you dig it out. So that does not encourage the very matter which the Act was designed to encourage.

The only other matter which I wanted to refer to in relation to that subject matter of the 1688 legislation is that, as reference has been made – and I think your Honour the Chief Justice picked up this reference in the Pape decision – to the importance of the legislation enacted at the time of the glorious revolution, namely, that an approach to dealing with Crown prerogatives which is narrow or does not accord the ordinary language of a statute is one which fails to recognise the object and design of that legislation at that time. That is a matter which certainly Chief Justice Spigelman took up and your Honour, as I say, adverted to in the decision in Pape.

GUMMOW J: What was the nature of the litigation before Justice Hamilton?

MR BANNON: It was declaratory relief commenced by my client plus orders for recovery. The scheme of the Act is you pay a full royalty on all minerals mined but the Crown is obliged to repay seven-eighths in relation to minerals which are not determined to be publicly owned. We contend that my clients contended that the copper was not publicly owned so that they should have reimbursed seven-eighths. So we brought declaratory proceedings to declare the position as to the past and going forward as to the future plus an order for repayment of seven-eighths of the royalties which had been already paid on ore which had been mined in relation to the

copper and, hence, there was a monetary judgment in favour of our clients as well as a declaration. So the case has significance for my clients both in terms of obviously the amount of money but also there is a lot more mining to be done in this area going forward and, hence, the importance of the declaratory relief as well.

FRENCH CJ: Mr Bannon, having regard to the question I put to you earlier and your acknowledgement that some of these wider issues might have to be canvassed, is there any risk of a 78B notice requirement lurking in this debate if special leave were to be granted?

MR BANNON: There may be.

FRENCH CJ: I did not see any reference to it having been considered in your submissions.

MR BANNON: No, it has not been. We would have to give consideration to that, your Honour. May it please the Court.

FRENCH CJ: Mr Solicitor.

MR SEXTON: If the Court pleases. Your Honours, before I come to the substantive issues, can I ask your Honours to note two things. One is that it really relates to the special leave grounds that this case arises out of a rather specific fact situation, we do not know whether it would be likely to arise again, but it is not quite quality of value in terms of the gold and copper in this mine, but I think it is 60 per cent gold and 40 per cent copper in terms of the value of so far that has been extracted or for the relevant period.

FRENCH CJ: This is what underpinned Justice Handley’s hybrid characterisation.

MR SEXTON: Yes, that is right, your Honour. The second thing is, as we noted in our written argument, that in a contemporary sense this question cannot arise except in New South Wales seemingly under the mining legislation in the other jurisdictions, except in relation to some minerals that may have been privately owned at a much earlier period, except in Victoria where it could be, but otherwise going back earlier than 1900. I think in Victoria it is much more recent.

Your Honours, in relation to the substantive question, the majority in the Court of Appeal really made the decision, in a sense, on two bases. The first was the construction question in relation to the term “mine of copper” which arises out of the 1688 legislation and to find there in favour of the State of New South Wales that this particular mine could not be categorised as a mine of copper, and I will come back to that in a moment. Secondly, to say in any event that on the assumption, which seems to be accepted, that your Honour the Chief Justice had already raised, that the prerogative had survived various legislative changes over a long period of time, that the prerogative had not been expressly or with sufficient clarity affected by any of those statutes, including the English legislation of 1688 and 1693. So that, in a sense, there were those two bases for the majority judgment in the Court of Appeal. We would say that on both of those bases that the judgment in the Court of Appeal is correct and that that is obviously something to be taken into account in terms of deciding this application.

Your Honours have already been taken, in a sense, to the Case of Mines. There is a summary of its effect in our written argument at page 125 of the application book at paragraph 9 which is taken from Lord Justice Lindley in Morgan’s Case where he says that:

At Common Law all gold and silver occurring in any mine in England or Wales belonged to the Crown; and if metalliferous ores contained gold or silver to such an extent as to be worth extracting, and if such ores could not be obtained without interfering with such gold or silver, the whole of such ores belonged to the Crown . . . This was settled in the great Case of Mines.

So it is in the wake of that particular decision that one looks at the 1688 and 1693 statutes. In the case of the 1688 statute, my learned friend has already referred your Honours to that, but it is the phrase “mine of copper” there that has been the subject of construction in the courts below and, as your Honours will appreciate, the construction for which we contend is that this was not to be categorised as a mine of copper in this case and that - - -

GUMMOW J: Are you saying there is no special leave point, Mr Solicitor?

MR SEXTON: No, I am not. I am not saying there is not a question of law, your Honour, that could not be a special leave point. I cannot say that in this case, but I am saying that the majority in the Court of Appeal below that their judgment was correct and, if your Honours would accept that, that is something that would obviously be relevant to the special leave application. Your Honours, it was part of our argument and accepted by the majority that the 1693 statute, which said that it was for the better explanation of the 1688 statute, operated on the same premise. In other words, that when it used the term “mine of copper” or tin iron or lead, that it did not have a different meaning from that - - -

FRENCH CJ: It was not imported into New South Wales by the Imperial Laws Application Act, was it? The 1688 Act was.

MR SEXTON: It was not preserved in New South Wales after the introduction of that. There is a question as to whether it could ever have been applicable on its terms to New South Wales or to any of the Australian colonies, but in a theoretical sense, as at 1693, it was available, if I can put it that way, to be applied, if it could be. We say that under its terms that that was not possible. So that if one takes that question of construction and as the majority in the Court of Appeal took it, we would say that that would dispose of the case. But, in any event, Acting Justice Handley, with whom on this point Justice Basten essentially agreed, said that, in any event, those statutes and no other New South Wales statute had, with sufficient clarity, detracted from the prerogative that had been set out and noted in the Case of Mines.

I will not take your Honours to Barton’s Case where there are various statements about the express nature that is required in a statute before the prerogative can be affected, but Acting Justice Handley explained why, in his view, that had not happened in this case and we would say that, certainly given the difficulties of construction in relation to those statutes, it will be very hard to make out an argument that they displayed a clear intention to affect the prerogative. So that on those two bases we would say that the majority in the Court of Appeal were correct and that on that basis it is not a suitable case for special leave. I think, your Honours, unless there are any other particular matters, those are the submission of the respondent.

FRENCH CJ: Thank you, Mr Solicitor. We will not need to hear from you, Mr Bannon. There will be a grant of special leave in this matter. What is the estimate of time?

MR BANNON: A day.

FRENCH CJ: Mr Solicitor?

MR SEXTON: Yes, in relation to your Honour the Chief Justice’s question, I cannot think of something that would give rise to a section 78B issue here.

FRENCH CJ: As long as we do not have any surprises coming out of the woodwork.

MR SEXTON: We will think of it again, your Honour, but I just cannot think of one at the moment, that is all, and if that is true, the case, we would think, would be a case for a day.

FRENCH CJ: All right. Thank you.

AT 10.04 AM THE MATTER WAS CONCLUDED